Mutual Funds

Related Outside Content

Recently, a few colleagues and I were reminiscing about an ad that Gus Sauter, Vanguard’s retired chief investment officer, had hanging in his office for years. It depicted a monkey at a computer managing a portfolio. The ad’s message? Indexing is so simple a monkey could do it—the implication is, of course, that sophisticated investors […]

Many investors have added exchange traded funds to their investment portfolios for a number of reasons, such as the tax benefits of the ETF structure. ETFs, like mutual funds, hold a basket of securities and reflect the performance of their underlying holdings. However, when mutual fund managers rebalance their portfolios, they accrue capital gains that […]

As more investors shift assets into exchange traded funds, active managers are crafting their own ETF strategies to get a slice of the growing demand. Active money managers are launching their own ETFs as demand from institutional investors, retail investors and financial advisors grow. For instance, T. Rowe Price Group, Legg Mason, Principal Globlal Investors […]

ETF Trends editor Tom Lydon appeared on CNBC Friday to discuss the volatility in the Chinese yuan and growth in the ETF industry. Watch the video below to see the full interview. To view past video interviews, visit our video section.

As the exchange traded fund industry grows, more financial advisors are beginning to utilize the investment vehicle to gain market exposure. Reflecting financial advisors’ shift toward low-cost and passive index-based strategies, the number of advisors who reported selling ETFs is at an all time high, according to Cogent Wealth Reports. Specifically, 76% of advisors are […]

Exchange traded funds are becoming the go-to investment vehicle to gain market exposure, which has led to increased correlation in the equities market, higher trading costs in individual securities and diminished demand for stock analysis. According to an academic paper, titled “Is There a Dark Side to Exchange Traded Funds (ETFs)? An Information Perspective,” the […]

Franklin Templeton could be expanding its exchange traded fund lineup with smart-beta index offerings instead of adding more actively managed ETFs. According to Franklin chief executive Gregory Johnson, the money manager will pause its active ETF expansion to observer how Eaton Vance’s non-transparent NextShares exchange traded managed funds will do, reports Jackie Noblett for Ignites. […]

Retail investors are putting more money into exchange traded funds than mutual funds, with big securities firms pointing to rapid growth among smart-beta offerings. According to Broadridge Financial Solutions, assets in ETFs at retail financial-services companies, which help individual investors and financial advisors, increased by $265 billion, or 14%, year-over-year through June, reports Daisy Maxey […]

The upstart exchange traded fund industry has been slowly chiseling away at mutual funds’ market share. However, traditional fund providers are taking action, creating ETF teams of their own as a precursor for potential future launches. J.P. Morgan Asset Management, Principal Funds, Legg Mason and Goldman Sachs Asset Management have hired leaders and experts in […]

When building out an investment portfolio, investors have many options at hand, including stocks, mutual funds and exchange traded funds. While many are familiar with stocks and mutual funds, ETFs are relatively new to the investment world. To start off, open-end mutual funds are backed by a group of investors who pool their money and […]

Legg Mason Inc. has moved closer toward the exchange traded fund arena, filing with the Securities and Exchange Commission to build index-based stock and bond ETFs. According to a recent SEC filing, Legg Mason is applying for an exemptive relief to create ETFs that reflect the performance of an underlying index. “The Initial Fund will […]

Many active strategies have fallen short of their benchmarks and passive exchange traded funds over the years as simple and concise indexing rules help keep index-based strategies on track. Over the past five years, only 21% of active mutual funds have outperformed their benchmarks, reports Julie Verhage for Bloomberg. Consequently, investors have funneled billions into […]

Exchange traded funds are gaining the upper hand among financial advisors who are looking for better investment alternatives to traditional, open-end mutual funds. According to a recent Financial Planning Association survey of advisors, 81% of respondents use or recommend ETFs with their clients, whereas 78% of advisors surveyed use or recommend mutual funds. [What an […]

Many have capitalized on dividend mutual funds’ reinvestment benefits, but with dividend exchange traded funds rising in popularity, investors are beginning to grow their portfolios with ETF dividend reinvestment plans. Mutual funds are losing a key advantage to ETFs, writes Sarah Max for Time, pointing to the rising popularity in dividend-focused ETFs that have pushed […]

Exchange traded fund investors have a plethora of options and strategies to gain exposure to the various markets. Nevertheless, people should take the time to consider the associated fees that come with their investments as the costs do add up over time. Aside from the upfront cost or commission for buying a fund, investors may […]

Active managers could turn toward exchange traded managed funds, or ETMFs, to lower costs and capitalize on the tax efficient structure. Eaton Vance’s Navigate Fund Solutions unit has received SEC approval to offer the new type of ETMFs under the NextShares brand. The ETMFs will combine some of the best features of ETFs and traditional […]

After bringing on bond guru Bill Gross to run its Global Unconstrained Bond Fund, Janus Capital Group is now working on an exchange traded fund adaptation. According to a preliminary Securities and Exchange Commission filing, the regulator is looking over an application for the Janus ETF Trust under the Investment Company Act of 1940 for […]

With over $2 trillion in assets under management, the U.S. exchange traded fund industry shows no signs of slowing as investors increasingly turn to the ETF investment vehicle for their portfolio needs. ETFs offer low costs, transparency and greater liquidity and tax advantages than mutaul funds, writes Jon Stein, founder and CEO of Betterment, for […]

The average retail investor may be better off sticking to a passive index fund or exchange traded fund investment strategy. “A blindfolded monkey could select a portfolio that would do just as well as one selected by the experts,” according to Burton Malkiel, professor at Princeton University and author of “A random Walk Down Wall […]

More are taking a shine to passive, index-based exchange traded funds as disillusioned active mutual fund investors become fed up with underperforming assets and a large tax bite. Many mutual fund investors with taxable accounts are discovering that their active funds realized significant capital gains that need to be paid taxes on, reports Kelley Holland […]

Most passive index-based exchange traded funds charge lower expense ratios that are comparable to mutual fund institutional share class fees. On an asset-weighted basis, three of 14 ETF categories showed a lower asset-weighted expense ratio than their mutual fund counterparts, writes Alex Bryan for Morningstar. Specifically, large-cap blend, mid-cap growth and small-cap blend categories whoed […]

As Eaton Vance (NYSE: EV) readies its recently approved non-transparent exchange traded managed funds, some anticipate that ETMFs could carve out a larger chunk of the mutual fund industry’s market share, with more investors shifting into the cheaper active investments. Eaton Vance executives believe that the new ETMFs, which will be launched under the NextShares […]

Most mutual fund investors have witnessed their portfolios underperform the broader market, and to add insult to injury, many will have to pay for a capital gains distribution. Instead, people should consider switching over to exchange traded funds, which are lauded for their tax efficiency. As we head toward the end of the year, investors […]

Passive index-based exchange traded funds have been outpeperforming active stock pickers as actively managed mutual funds’ failed to focus on strong tech names. According to S&P Capital IQ Fund Research, 80% of running large-cap mutual funds have underperformed the S&P 500 in 2014. [Active Stock Pickers Trail Passive S&P 500 ETFs] Bank of America also […]

As an investor contemplates his or her destination, one will have to weigh the potential benefits and drawbacks of utilizing an exchange traded fund or mutual fund investment vehicle. For instance, many appreciate the ability to buy and sell ETFs, like a stock, at market price on an exchange throughout normal trading hours, something that […]

The exchange traded fund industry’s growth story is not limited to U.S. markets. Across the pond, European investors, dissatisfied with underperforming and costly active mutual funds, have more than doubled assets in passive index-based ETFs in the past five years. As of the end of September, the European-listed ETF market expanded to $362 billion euros, […]

With fewer active managers outperforming the market than anytime over the past decade, disillusioned investors are turning to passive, index-based exchange traded fund investment vehicles. According to Bank of America data, less than one in five active managers have beat the market for the year ended October, reports Stephen Foley for Financial Times. [Epic Fail: […]

With exchange traded funds gaining wider acceptance, many investors are considering switching out their open-end mutual fund positions for the cheaper ETF options. Michael Kitces, a CFP professional and director of planning research at the Pinnacle Advisory Group, argues that shifting assets away from mutual funds and into ETFs makes sense for some retirees, especially […]

With short-sellers undermining managers’ positions and adding to active funds’ widespread under-performance, investors may be better off capturing market returns through a passive index-based exchange traded fund. According to the working paper, Do Short-Sellers Profit from Mutual Funds? Evidence from Daily Trades, by accounting and finance professors at Indiana and Standford universities, short sellers consistently […]