Investors Move to Passive Funds While Stockpickers get Creative

investorsUndaunted by the popularity and outperformance of index-tracking investments, mutual fund companies last year rolled out 193 new actively managed stock funds, many with some highly colorful concepts.

The fund companies aren’t giving up their efforts to win investment dollars with their stockpicking prowess. Rather, they are floating funds that are increasingly niche-oriented in the hope of getting shelf space next to the generic S&P 500 index and other passive funds that are sucking cash out of active funds. Last year, passive funds brought in $166 billion in new investor dollars, while investors pulled $98 billion out of traditional funds run by stockpickers.  Read More…

This article has 7 Comments

  1. Ayden Courter

    As long as these market makers don't go back to their ways of default credit swaps and trick the public into buying cheap mortgages and turn it around and bet on that the market was going to crash. Other than that we will be fine.

  2. Kailyn M.

    Still don't get how there can be groups of people who love money so much they will want to go into thtat market, wear a suit, and put together an instrument to entice people to buy into it. I don't get it. Where is the love of creating something? This isn't creating anything.

  3. Clay

    I think the public is overwhelmed byt he choices and are just happy with what they have figured out. So they giving new stuff to convince us to invest is not necessarily going to work.

  4. Yashaun W.

    Lol! I love how in the article it mentions a fund named "3D Printing and Technology". Nah, they aren't putting "3D Printing" in the title as a ploy to get interest, would they? 😛 This field is hilarious.

  5. Jaeden

    I'm interested but from what i am reading its the same old funds.

  6. Ainsley H

    So when a fund closes do the investors get their money back or do the managers take the money and run — claiming they needed the existing funds to close the fund properly?

  7. Ace

    Actively traded funds are still quality picks in 2015. So far i am up 18%. My issue is why they need to complicate the waters because once i had figured out and got a hand on my portfolio they begin doing stuff like this making me question my holdings.

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