Investors haven’t soured on all active fund managers ― only those who pick U.S. stocks.
Processing Content
Actively managed mutual funds and ETFs that own domestic stocks experienced $98.5 billion in net redemptions in the first six months of 2017, according to the latest figures compiled by Morningstar. Active funds that buy international stocks attracted inflows of $8.7 billion and active funds that buy bonds gathered $106.5 billion.
“The trend for U.S. stocks funds keeps going and going,” said Russel Kinnel, director of manager research at Morningstar. “There is a perception that they can’t beat their benchmarks, especially when it comes to large-cap stocks.”
A pedestrian views a mobile device while walking past an American flag displayed outside of the New York Stock Exchange (NYSE) in New York, U.S., on Monday, July 3, 2017. U.S. stocks rose in light trading and the dollar strengthened as factory data bolstered optimism in the strength of the American economy. Crude climbed for an eighth day. Photographer: Michael Nagle/Bloomberg
Michael Nagle/Bloomberg
Passive mutual funds and ETFs remain popular across the board. Those funds had inflows of $394.1 billion in the first six months of the year, while active funds as a group saw net redemptions of $6.8 billion. The trend has benefited the two biggest money managers, BlackRock and Vanguard, both of which are best known for their passive products.
Some active mangers such as Fidelity Investments have added a lineup of passive funds to attract money while others like T. Rowe Price have doubled down on stock picking, betting their performance can help them buck the trend.
Investors gravitating toward passive strategies have increasingly bought ETFs, which track indexes and trade throughout the day like stocks. U.S. ETFs attracted $246.3 billion in the first six months of this year, not far from the record $286 billion they received in 2016, according to data compiled by Bloomberg.
A federal judge finds that the embattled brokerage Alpine Securities' argument that FINRA should answer to the federal executive branch amounts to " wishful thinking" that "collapses under the weight of spiraling aspiration."
The firms' collaboration shines a light on how the wealth management business works today and how it is evolving, as advisors weigh independence against the risks of "poking the bear" when they leave.
Matthew Pallai said he has no doubt wealth managers explained the risks of private credit when recommending it to clients, but the recent rush to withdraw money from credit funds suggests "they probably should have said it more often and said it louder."
Court decisions vacated the Biden administration's DOL rule — but that didn't make rollover rules easy, experts say. Firms that get compliance right will have an edge in tapping a trillion-dollar-plus market.
New research from the nonprofit, nonpartisan Employee Benefit Research Institute shows pessimism about retirement preparedness is on the rise — that could open doors for advisors.
Subscribers can stay up to date on key industry issues while earning one hour of continuing education credit toward maintaining professional certification.
