Passive funds Flashcards
How is the net inflow into low cost passive funds in 2018?
The flood of money into low-cost index funds is slowing in 2018, testing Americans’ unprecedented embrace of passively managed investments during a nine-year-old bull market for stocks.
How much were passive inflows down?
That was the lowest amount of new monthly money for these funds since early 2014. For the first six months of 2018 passive inflows were down 44%, compared with the same period a year earlier.
Are most invoestors turning into passive investing?
But there are no signs yet that most investors are turning in that direction. Actively managed funds have suffered net outflows of more than $500 billion since 2015, according to Morningstar. Roughly $29 billion in client money left those funds during the first half of this year.
How are two year US treasuries yields at the moment?
U.S. government bond prices edged lower Thursday, sending the yield on two-year notes to its highest close since July 2008, as investors bet that inflation is growing fast enough for the Federal Reserve to continue raising interest rates.
How large is the difference between the two year treasury and the 10 year treasury?
The difference between yields on two- and 10-year Treasurys narrowed to 0.259 percentage point, the smallest since August 2007. The dispersion between shorter-term and longer-term rates, known as the yield curve, is a crucial indicator of sentiment about the prospects for economic growth, with wider gaps signalling stronger potential growth.
What are some signs for the ETF price war?
BlackRock Inc. BLK 0.08% cut fees on several stock and bond ETFs last month, while State Street Corp. introduced last fall a new low-cost lineup of more than a dozen funds. The latest volley came last week when Vanguard eliminated online transaction fees for virtually all ETFs bought and sold through its brokerage platform, including rivals’ funds.
How much have ETF fees fallen in the past 10 years?
ETF fees have fallen 30% in 10 years, according to Morningstar Inc.
how cheap are the cheapest ETFs?
The cheapest ETFs now cost just $3 a year for every $10,000 invested, and some analysts predict that even those meager fees could shrink even further. Of the new money that has flooded into ETFs in the past year, more than three-quarters has gone into funds that cost $15 a year or less for every $10,000 invested, according to a report from JPMorgan Chase & Co.
How did the low-cost war begin?
The ETF price wars began in earnest in 2012, when BlackRock launched its ultracheap iShares Core ETFs to stave off the rapid gains made by Vanguard’s low-cost funds.
What is Blackrocks share of the US ETF market?
By most accounts, it succeeded. Since then, BlackRock’s share of the U.S. ETF market has stabilized at about 40%, and the firm remains the largest ETF provider.
Which company refused for a long time to shrink its share?
State Street, by contrast, long resisted pressure to offer ultra-low-cost ETFs. That is a big reason why its share of the ETF market has sunk to less than 18% and it was overtaken in 2015 by Vanguard as the second largest provider, analysts say.
What happens to US government bonds lately with the trade tensions?
Yields, which fall as bond prices rise, slipped overnight after the White House said it was looking at assessing 10% tariffs on an additional $200 billion in Chinese goods—spurring Beijing to say it would retaliate with more tariffs of its own. The latest steps by the U.S. and China pressured global stocks while driving up demand for U.S. Treasurys, which tend to do well when investors feel shaky about the economic outlook.
