Could the passives tide turn?

Could the passives tide turn?

Anna Fedorova
clock

As active managers struggle to find value in current volatile markets, with many holding unusually high cash allocations, investors have continued to flock to passive products.

The latest report from the ETFGI consultancy showed assets in ETFs reached another milestone in recent weeks. Their AUM surpassed that held in hedge funds for the first time on record in Q2, with nearly $3trn now invested in ETFs globally. This shift is understandable, considering the average cost of investing in an ETF is 31bps, according to the research firm.  In contrast, many hedge funds still charge clients based on the old 2%/20% fee structure, encompassing a 2% management fee and a 20% performance charge. But at a time when equity valuations are looking pretty full, are inve...

To continue reading this article...

Join Investment Week

  • Unlimited access to real-time news, analysis and opinion from the investment industry, including the Sustainable Hub covering fund news from the ESG space
  • Get ahead of regulatory and technological changes affecting fund management
  • Important and breaking news stories selected by the editors delivered straight to your inbox each day
  • Weekly members-only newsletter with exclusive opinion pieces from leading industry experts
  • Be the first to hear about our extensive events schedule and awards programmes

Join now

 

Already an Investment Week
member?

Login

More on Markets

Industry Voice: T. Rowe Price's 2022 Midyear Market Outlook summary

Industry Voice: T. Rowe Price's 2022 Midyear Market Outlook summary

Transitioning to a new paradigm

Ritu Vohora, Investment Specialist, Capital Markets at T. Rowe Price
clock 23 June 2022 • 2 min read
Amazon shares are down 40% from its peak

Growth stock pickers feel like 'a kid in a candy shop'

'It is time to go shopping'

clock 22 June 2022 • 4 min read
David Kimberley is an investment trusts writer at Kepler & Partners

Opportunity amid madness: Valuations more attractive in wake of panic-driven price drops

Buy opportunities have arisen

David Kimberley
clock 21 June 2022 • 4 min read
Trustpilot