It may be premature to hit the print button for the death certificate of active management, but changes to the investing landscape over the last several years have forced a reassessment of the value proposition this strategy offers. Research suggesting that active managers fail to add value is, of course, nothing new. Over the last several decades, a number of academic studies have suggested that on the whole, active managers fail to consistently beat the market, and that the majority of mutual funds fail to beat their benchmark after costs are taken into consideration. This frustration with the costs of active management paved the way for the rise of indexing as an investment strategy, as many investors have preferred to own the market through a low cost vehicle rather than pay hefty fees to a manager to occasionally beat the market. [click to continue…]
First, the good news: all those fears about runaway inflation following from the massive injections of capital into financial markets appear to have been overblown. Now for the bad news: the alternative may be much worse. For months wary investors have been eagerly watching CPI reports, fearful of the release indicating that price increases are [...]
After lingering in the background of the ETF industry for the last several years, fixed income funds have stepped up in recent months to become one of the primary drivers of growth. Through the first seven months of 2010, cash inflows to ETFs totaled $49 billion. Of this amount, more than $23 billion has been [...]
Earlier this month, InvestmentNews released a list of the ten ETFs financial advisors researched the most in 2009. The list, which was based on information provided by Morningstar, included several traditional inflation hedges, such as the SPDR Gold Trust (GLD) and iShares COMEX Gold Trust (IAU), as well as the broad-based PowerShares DB Commodity Fund [...]
As interest in ETF investing has surged in recent years, issuers have rushed to expand their product lines into every corner of the investable universe. The first generation of ETF products consisted mostly of equity funds designed to track well-known benchmarks, and while the vast majority of ETF assets remains in these “plain vanilla” funds, [...]
Over the last year, U.S. equity markets have staged a remarkable recovery as volatility has plummeted and the emergency stimulus measures implemented amidst heated debate appear to have had their intended effect. Indications that unemployment may be close to peaking and that consumer confidence is on the rise once again only add fuel to the [...]
The development of the ETF industry has in many ways leveled the investing playing field, bringing strategies previously available only to large institutions and sophisticated, high net worth investors to anyone with a Scottrade account. Most of these “democratizations” have involved very complex, high-risk tactics. Leveraged ETFs, hedge fund ETFs, and long/short ETFs have significantly [...]
