Disillusioned with active management, more and more plan sponsors are running the other way. They’re taking a passive stance in their portfolios as they ride out the vagaries of equity and fixed income markets. Probably the boldest move of late has come from officials with the US$460-million Montgomery County Pennsylvania pension fund, which announced plans to shift 90% of its assets to index funds bought from Vanguard. Why? It’s about the costs.
Active exchange-traded funds (ETFs) are critical to the future of the industry. However, Knight Capital’s Reginald Browne says, when it comes to institutional trades, active ETFs are a bit more challenging for a market-maker.
More than one-third of institutions in Canada using exchange-traded funds (ETFs) expect to increase their allocations to ETFs in the coming year, according to a study.
State pension systems that pay the most for money management get some of the worst investment returns and could reduce costs by indexing, according to a study.
At a Toronto roundtable, experts discuss how exchange-traded funds are moving markets and whether or not investors need to worry.
Investors are now running away from just about everything fixed income—high-yield bonds, treasuries, etc. But there is one area of the beleaguered fixed income universe where money continues to flow the right way: target-maturity bond exchange-traded funds.
Pennsylvania's Montgomery County plans to moving nearly all of its pension fund assets into exchange-traded funds after being frustrated with high management fees and lacklustre performance.
Nearly a year after the Knight Capital glitch, two major stock exchanges have taken big steps to help market-makers do their job better. Last week, the U.S. Securities and Exchange Commission gave the go-ahead to the NYSE to implement a market-maker incentive program to help improve liquidity and efficiency in the trading of some smaller exchange-traded funds.
As more and more managers seek to deliver the benefits of ETFs to their pension clients, managed portfolios could see a lot of interest from institutions looking for cheaper ways to diversify.
Demand for low-vol stocks has temporarily at least taken the slow and steady out of the equation as investor demand has pushed those stocks to the top of the S&P 500. The question is, What happens if and when low-vol prices start to decline to more reasonable valuations? Could a bubble be brewing in low-vol ETFs and other products that aim to deliver minimum volatility?