Active management

While Guinness Atkinson pursues the first full mutual fund-to-ETF conversion, similar moves have begun elsewhere in the fund industry.

The fund industry's latest arrivals underline the seismic shifts underway in the business of asset management.

Despite growing to about $1.1 trillion in AUM, senior executives made a series of bets to keep pace in a changing industry that have yet to pay off.

The fast money has more than three times the impact on equity valuations than long-term investors like pension funds, according to a recent paper.

The firm announced plans in March to acquire $200 million of its stock and has been in the market on average once every three trading days since.

Some of the industry’s biggest players are taking a wait-and-see approach as active, non-transparent funds take their crucial first steps.

Leveraging big data, machine learning and artificial intelligence will extend stock selection beyond its current capabilities, according to Procure Holdings President Bob Tull.

Here's how the largest groups have fared during unprecedented market activity.

Still, clients continue to invest their assets into the industry’s cheapest funds and are saving billions as a result.

"It's now June and if you’ve been on a deserted island for the last five months you couldn’t have fathomed the movements we’ve seen," an expert says.

Wild market swings have given many active managers a rare respite after a decade-long battle against the rise of passive investing.

The asset manager plans to leverage Precadian’s ActiveShares product, which requires funds to publish an indicative value of its holdings every second.

The results were “not just predicated on expense ratios,” an expert says.

“Just because someone’s charging 1% doesn’t mean you should take them off your list,” an expert says.

As liquidity disappeared amid the coronavirus-sparked mayhem, veteran fixed-income portfolio manager Gemma Wright-Casparius saw opportunities.

The purchase comes as active asset managers feel intensifying pressure to bulk up as they face stiff competition from passive and index-tracking funds.

Many of the executives selected this year say the industry’s future may lie in its sudden change to a fully virtual business model.

Funds advised by Katie Koch, whose firm has about $1.8 trillion under supervision, are beating their benchmarks at an 80% rate in 2020.

With few corners of the fixed-income industry safe from harm, investors’ faith in managers appears to be intact — for now.

“People are just saying, ‘Why should I pay for an active manager when most of them lose to the benchmark anyway?’ This is a big deal,” an expert says.