John Bogle, founder of Vanguard, also addressed the reform talks over money market funds and how the SEC may break the buck, adding “I thought the $1 NAV was crazy from the day it began,” Ignites reports. [Short-Duration ETFs Can Substitute for Money Market Funds]
“The fact is that money market fund net asset values fluctuate,” he said. “[Mutual fund firms] don’t want to let the world know that money market funds’ net asset values fluctuate.”
Investment managers are also warning advisors about the dangers in emerging market equities.
“Over the last five or six years there’s been a wave of equity money moving into emerging markets indiscriminately,” David Hero, portfolio manager at Oakmark International Fund, said. “That’s made stocks frothy. I still stand by the notion that emerging markets will be the engine of global growth over the next 20 years, but that’s different than saying ‘Brazil has a lot of good companies trading at good prices. Emerging market equities are starting to get beat up. if this keeps up, maybe they’ll end up in our holdings in a year.”
Alternative investment strategies have also been gaining in popularity as advisors seek out ways to help diversify portfolios and limit risk. There are now over 400 alternative strategy mutual funds and ETFs, Nadia Papagiannis, Morningstar’s director of alternative fund research, said. Panelists explain that alternatives help clients to stay in the stock market during volatile conditions, writes Allan S. Roth for Financial Planning.