The market’s wild volatility and herd-like movement has created an extremely difficult environment for stock pickers and caused some investors to abandon actively managed mutual funds for indexed exchange traded funds.
Even prominent fund managers are having trouble in the current environment. However, ETFs seem to have attracted a larger following as stocks move in tandem.
Bill Miller, manager of the Legg Mason Value Trust, was known for his uncanny ability to hand pick stocks, which helped the fund outperform the S&P 500 Index for a record 15 straight years, reports Herbert Lash for Reuters.
However, as the markets began to move in lockstep, driven by “risk-on” and “risk-off” macroeconomic events, Miller’s style of investment became harder to implement. Miller will be stepping down from his post in April.
Legg Mason recently filed to launch its first ETF. [Legg Mason Files Bond ETF]
“Markets can go into these phases where strategies which are pretty robust can come under a lot of pressure, and I think that’s clearly the case now,” Miller said in the Reuters article. “I love the values in the market. I hate the way in which these things are trading.”