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ETFs

A look at the numbers shows that exchange traded funds are starting to move in lockstep with RIAs and vice-versa. RIAs invested $496 billion in ETFs in the 12-month period ended June 30, 2015 – that’s a $78 billion increase compared to the same period the year before. By comparison, the wirehouse channel added 20% fewer ETF assets, or $397 billion in the last year; granted, an amount that was $70 billion greater than its aggregate investment during the same 12-month period the year before, according to Broadridge Financial Solutions. RIAs that manage portfolios and make discretionary investment choices for their clients value ETFs because they provide advisors with easy access to market segments at a cheap price – an especially important factor for RIAs who are compensated on an asset-fee basis. Fee-based advisors appreciate ETFs’ tax efficiency, liquidity and broad exposure at low cost. Conversely, RIAs are a prized channel for ETF-makers like State Street, Invesco, PowerShares, Vanguard Group and BlackRock. ETFs are also a major ingredient in portfolios devised by robo-advisors -- essentially automated RIAs -- for the mass affluent who invest more than 90% of their assets using ETFs.


Dan Reyes: 'Despite the ETF’s capable advisor and sound approach to factor investing, it has not gained scale since its 2018 debut.'
Dan Reyes: 'Despite the ETF’s capable advisor and sound approach to factor investing, it has not gained scale since its 2018 debut.'

The Malvern, Pa., manager blamed $44-million fund's scale, but marked underperformance and a manager departure as likely doomed it, one Vanguard watcher says

18 hours ago by Brooke Southall

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Brooke's Note: The reason so many financial advisors like factor funds is that -- over time -- you get all the benefits of indexes but with a cherry on top of slight out performance, if you invest long-term. It's cerebral and disciplined. But what happens ...

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Jeffrey Ptak: The star rating seems to tip the odds in the investor’s favor.'
Jeffrey Ptak: The star rating seems to tip the odds in the investor’s favor.'

The Chicago-based tracker assures investors that its ratings tilt odds in their favor though critics say it's more a gauge of momentum than scientific research.

Wednesday, August 31, 2022 – 5:08 AM by Oisin Breen

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Judge not, that ye be not judged -- unless you are the subject of a scathing, 4,500-word Wall Street Journal takedown of your marquee fund rating system.

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David Booth has kept a steady hand on the tiller at DFA, but is it enough?
David Booth has kept a steady hand on the tiller at DFA, but is it enough?

Vanguard, BlackRock and Avantis rattle a complacent Dimensional Fund Advisors with fee cuts and ETF roll outs based on 'smart beta.'

Tuesday, August 9, 2022 – 1:57 AM by Oisin Breen

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Brooke's Note: DFA was founded in 1981 with an RIA-aligned philosophy of slow-and-steady-wins-the-race, long on thoughtful process and short on glitz. It's going strong in 2022, but if growth is a measure of health, then it's caught a cold or showing early signs of something ...

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Walt Bettinger is playing his crypto cards carefully.
Walt Bettinger is playing his crypto cards carefully.

With investors undeterred by crypto winter, the SEC offering wiggle room and Fidelity, a largely unopposed giant, threatening to run away with the market, CEO Walt Bettinger makes a bold leap from even two years ago.

Wednesday, August 3, 2022 – 1:59 AM by Lisa Shidler

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Brooke's Note: He who is last shall be first -- or something like that. Schwab is a laggard in getting behind cryptocurrency but the envy of most in where it's entering the market -- during a fire sale. MicroStrategy tossed Michael Saylor out of the CEO ...

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Cathie Wood has proven impervious to monumental setbacks.
Cathie Wood has proven impervious to monumental setbacks.

The ARK ETF bought index data from a South Carolina start up with a largely hypothetical track record created from back-testing

Wednesday, July 20, 2022 – 6:38 PM by Brooke Southall

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Brooke's Note: When somebody sells you "transparency," ask questions. It's a little like trust. Once somebody brings it up, it's at least a minor red flag. That is why I dug into this latest Cathie Wood misery after seeing -- and mostly ignoring -- hundreds, or thousands, of ...

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Urska Velikonja: We expect for these large asset managers to consider abortion in the same way they consider other social-policy issues.
Urska Velikonja: We expect for these large asset managers to consider abortion in the same way they consider other social-policy issues.

Culture war envelops ESG. 'Big-three' face crisis on abortion rights • The population is 50.8% women, 13.4% Black, 18% Latinx, but 76.6% of financial planners are white men. • Schwab funds CFP effort to rebalance • S&P 1500 pension plans are running a $55 billion surplus • Vanguard nears BlackRock institutional asset sum • Daniel Crosby lures behavioral finance interest, via Diet Coke.

Saturday, June 11, 2022 – 1:05 AM by Oisin Breen

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Vanguard Group, BlackRock, and State Street are being pressured to add abortion to ESG choices just as women appear to be on the verge of losing their right to choose. See: Suddenly Vanguard, BlackRock, State Street not only have the assets but the power of ...

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Larry Fink: I don't want to be the environmental police.
Larry Fink: I don't want to be the environmental police.

The New York City manager of $9.6 trillion races to redefine -- and resuscitate -- reeling 'ESG' after the Ukraine war exposed perils of charging a premium fee to contain free market forces.

Wednesday, June 1, 2022 – 3:22 AM by Oisin Breen

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Brooke's Note: ESG has been around for decades as a way for pensions like Calpers to flex muscles and a way for a fringe group of retail investors to express their deeps. Then along came the mainstreaming of ESG with BlackRock arguably its voice -- ...

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Amy Lash: Like our clients, we think about performance over the longer-term.
Amy Lash: Like our clients, we think about performance over the longer-term.

Shareholder profits at the Malvern, Pa. company are being undercut by undisclosed millions in executive and staff pay raises as the company seeks to shore up its eroding value proposition.

Sunday, May 15, 2022 – 7:15 PM by Oisin Breen

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Brooke's Note: Vanguard gets it from both sides. It got slaughtered last year when it launched a mobile app, Beacon, to boos. It also got hammered on service during the pandemic. Yet this article focuses on Vanguard, perhaps, taking the steps at modernizing its workforce ...

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Alec Lucas: Vanguard has an 'at cost' philosophy but that doesn’t mean every product is priced such that its revenues exactly match its costs.
Alec Lucas: Vanguard has an 'at cost' philosophy but that doesn’t mean every product is priced such that its revenues exactly match its costs.

The $8.1 trillion in managed assets giant also cut fees on 32 funds, and kept fees at 109 funds unchanged, according to fiscal end-of-year reports, Sept. through Dec. 2021.

Saturday, March 5, 2022 – 1:19 AM by Oisin Breen

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At Vanguard Group ownership is a privilege, but like most privileges, it cuts both ways with investors, who share the blessings of fee cuts and the burdens of price hikes.

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Sue Thompson: The only free lunch in investing is diversification and that's the case here.
Sue Thompson: The only free lunch in investing is diversification and that's the case here.

The $881 billion Manhattan alts investor will delve into junk in addition to safer senior loans with new ETF. Nobody will complain about the 70 basis-point fee, if it again delivers higher returns and the inflation protection of floating interest rate loans.

Thursday, February 24, 2022 – 2:26 AM by Brooke Southall

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Brooke's Note: What are asset managers good for? Increasingly the answer is that they are finding ways of being the well-resourced middle player that tames Wall Street into delivering their expertise fairly and efficiently to Main Street investors. In this case, State Street is delivering ...

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Larry Fink: It's just a number.
Larry Fink: It's just a number.

After record AUM high, BlackRock chairman and CEO Larry Fink brushes off a milestone • SchwabSchwab hits records; Wall Street wants more • Mutual fund giant's ETF conversion yields bragging rights • Regulation Best Interest headaches unnecessary, despite SEC brouhaha, lawyers say • Workplace scheme wins big for Fidelity.

Friday, January 21, 2022 – 3:16 AM by Oisin Breen

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BlackRock's AUM tops $10 trillion -- "It's just a number," says CEO Larry Fink with likely a nod and a wink.

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David Booth continues to follow the Vanguard lead with price cuts and ETF conversions at DFA.
David Booth continues to follow the Vanguard lead with price cuts and ETF conversions at DFA.

Two of the favorite RIA index fund suppliers put more coal in the stockings of competitors and showed the era of fee compression hasn't found bed rock, yet.

Saturday, December 18, 2021 – 1:46 AM by Brooke Southall

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The king of cheap and a pretender to the throne are kicking competitors while they're down with sweeping mutual fund and ETF fee cuts in a very Black Friday day that's redefining the meaning of "cut to the bone."

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Fidelity Canada operates largely from this building in Toronto.
Fidelity Canada operates largely from this building in Toronto.

After Fidelity was rebuffed by the U.S. Securities and Exchange Commission, Fidelity Canada had more luck by turning to its own securities cop with a more abiding outlook on crypto currency as an investible asset

Saturday, December 4, 2021 – 4:12 AM by Lisa Shidler

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Brooke's Note: "Satoshi Nakamoto" released a paper describing a new software system he or it called Bitcoin. Nakamoto launched the bitcoin network on Jan. 9, 2009. We still don't know who or what Satoshi Nakamoto is, what its motives were, or are, or whether bitcoin is the ...

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Dana D'Auria: 'Every basis point counts.'
Dana D'Auria: 'Every basis point counts.'

The Chicago outsourcer is hopping on half a channel lane to sell house-brand ETFs that may make nifty 'sleeves' for model portfolios.

Tuesday, November 30, 2021 – 2:21 AM by Brooke Southall

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Brooke's Note: Envestnet filed for its ETFs with the SEC quietly and with an air of utilitarian resolve to simply shave a basis point or two, a keyboard click and tax ramifications in the bargain. Yet I can't help wonder if it didn't also put ...

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Walt Bettinger: If and when there is greater regulatory clarity for firms under our regulatory regime we would look forward to being able to offer direct trading.
Walt Bettinger: If and when there is greater regulatory clarity for firms under our regulatory regime we would look forward to being able to offer direct trading.

The $7.6 trillion in administered assets giant sees mixed signals from regulators who are drawing lines as it goes along -- treacherous regulatory conditions for a big company not built to shift course at a whim.

Thursday, October 28, 2021 – 1:21 AM by Oisin Breen

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Brooke's Note: Cryptocurrency is surely having it's moment in the sun but it's still all immersed in an air of radical unreality. It would sure seem more grounded if Schwab and Fidelity (which is far more advanced in Bitcoin investing) offered it matter of factly on ...

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