Charles Schwab has filed to launch an actively managed short-term bond exchange traded fund, in the latest sign that US fund managers see ETFs as the heirs to money market funds. The company’s proposed Active Short Duration Income ETF, its first active ETF, which will invest in investment grade short-term fixed income securities, professes to share the same goals as money funds – capital preservation and daily liquidity. It will …
A comprehensive analysis of fund returns in the UK by Vanguard has revealed that costs are the central contributing factor underlying the under-performance of active funds versus their benchmarks over the long-term. Peter Westaway, Chief Economist at Vanguard. According to Vanguard’s Case for Indexing research, only 17% of active equity funds and 4% of active fixed income funds that were in existence in 1997 outperformed their prospectus benchmark over the …
Registered Investment Advisers (RIAs) expect to see increased usage of Exchange-Traded Funds (ETFs) in client portfolios, while aversion to risk remains high, according to results of an Invesco market research study released today. RIAs surveyed believe ETFs will make up 24 percent of portfolio allocations over the next 12 months and 33 percent over the next three years, representing a 10 percent increase over results reported in Invesco’s survey of …
According to the latest data from Standard & Poor’s, most passive index funds, including exchange traded funds, beat out the performance of actively managed mutual funds. There are a few exceptions, but on the whole, active management is not outperforming. “There is nothing novel about the index versus active debate,” the newĂ‚Â S&P Indices Versus Active Funds Scorecard (SPIVA) report notes. “It has been a contentious subject for decades, and …
Alex is a founding member and Managing Partner as well as Portfolio Manager of The Rockledge Group and Rockledge Advisors. Rockledge is an independent investment advisory firm specializing in sector investing using proprietary “Sector Scoring and Allocation Methodology”. Rockledge manages funds for both US and European individual and institutional investors.
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The actively managed exchange traded fund category appears to be gaining momentum with the recent success ofĂ‚Â the PIMCO Total Ă‚Â Return ETF. Ă‚Â There has been a slew of active ETFs recently launched, which has led many to wonder how active management is defined with an ETF. “The active ETF universe is ‘heterogeneous,’” Robert Goldsborough of Morningstar said, though heavily skewed toward fixed income. “There are a lot of unique strategies, but …
How much would you pay for an investment that has a 50% probability to pay $1,000,000 and a 50% probability to pay nothing if you could enter the investment only one time? While the expected value of this payoff is $500,000, most people would not pay anywhere near that amount to enter this investment. The probability of the zero payoff is just too high. The more risk averse you are, …
Despite the diminished volatility in the equities markets and the growing complacency in the current rally, wary investors have sought out alternative investment strategies, like low-volatility exchange traded funds, to hedge potential risks. With the Knight algorithm induced flash crash, looming Eurozone crisis and presidential elections weighing on the minds of investors, many are keeping cautious with their investments, writes Dave Goodboy, V.P. of marketing for intrendX LLC, for Street …
Actively Managed ETFs: Actively managed exchange traded funds are beginning to make their mark in the $1.2 trillion ETF industry. Hybrid indices and equity-focused actively managed ETFs are hitting the market, after the success of theĂ‚Â PIMCO Total Return ETF. The active ETF universe is “heterogeneous,” says Morningstar ETF analyst Robert Goldsborough, though heavily skewed toward fixed income. “There are a lot of unique strategies, but not a lot of mainstream …
 —A growing number of investment firms, hoping to jump on the exchange-traded-fund band wagon, are launching actively managed ETFs. In recent weeks, for instance, several large managers best known for their active management, including PIMCO, BlackRock, Fidelity Investments, and John Hancock, either plan to or have already launched funds that seek to give investors the best of both worlds—mostly low costs, intraday trading and a chance to beat the indexes. …