Mutual Funds

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 […]

The majority of active large-cap funds have underperformed the broader market, but this may benefit the broad equities market and stock exchange traded funds as active managers try to play catch-up. Only 23% of large-cap mutual fund managers have outpaced the S&P 500 index this year, generating some of the worst performance results in the […]

Active mutual funds promise to generate greater alpha, but investors may be better off with index-based exchange traded funds as many active strategies fall short. According to S&P Capital IQ Fund Research, 80% of running large-cap mutual funds have underperformed the S&P 500 in 2014, reports Jeff Fox for CNBC. [Active Strategies Continue to Lag […]

More investors want index-based investments and exchange traded funds, favoring passive fund products over actively managed strategies. Passively managed stock and bond funds attracted $336 billion in new inflows over 2013, beating out the $53 billion in new inflows traditional mutual funds experienced, reports Kirsten Grind for the Wall Street Journal. Over the first seven […]

Traditional beta-index exchange traded funds are carving out a larger slice of the fund market share as investors turn to passive, index-based styles to better capture market returns. In the 12-months ended Jun 30, passive funds have brought in 68% of asset inflows, with ETFs making up 35% and passive mutual funds 33%, while actively […]

Trying to capitalize on the growing popularity of the exchange traded fund investment tool, Merk funds is the latest mutual fund provider to turn ETF purveyor as the company crafts an ETF adaptation of its Merk Hard Currency Fund (MERKX). According to the latest Securities and Exchange Commission filing, the Merk Hard Currency ETF (NYSEArca: […]

When picking an actively managed fund, people are betting on the fund manager’s ability to produce alpha, or outperformance. However, investors may be better served in a passive index-based exchange traded fund in the current environment. Cheap, traditional beta-index ETFs have outperformed most actively managed funds so far this year, reports Brendan Conway for Barron’s. […]

Mutual fund providers are jumping onto the exchange traded fund bandwagon. However, there are still some holdouts among the top open-end fund managers. Of the top 20 mutual fund providers by assets under management, American Funds, Dimensional Fund Advisors, Dodge & Cox, Lord Abbett, Janus and American Century have not pursued their own ETF offerings, […]

With most active fund managers failing to beat the broader market while charging high fees, Investors may be better off sticking to low-cost, index-based exchange traded funds. While active managers may play a role in identifying which companies can efficiently put capital to use and optimize aggregate growth,┬áProfessor David Blake, director of the Pensions Institute […]

Disillusioned with the performance in active funds, investors are now relying on passive, beta-index exchange traded funds to capture market returns. Morningstar analyst Michael Rawson argues that common sources of return actually explains the outperformance once attributed to skill in active management. “Old-fashioned market beta provides the bulk of return–hence, our conclusion that investors should […]

Merk Funds is the latest mutual fund provider to turn exchange traded fund sponsor, launching a new gold ETF that offers investors the opportunity to exchange shares for physical gold. According to a NYSE release, the Merk Gold Trust (NYSEArca: OUNZ) will begin trading Friday, May 16. OUNZ has a 0.40% expense ratio. The new […]