Actively managed funds trim holdings in face of ETF popularity
NEW YORK, June 4 (Reuters) Actively managed mutual funds are becoming less Canada Goose Outlet active, according to a new worldwide study conducted by Nasdaq OMX canada goose Group that will be released Thursday.
As competition between passive and active fund managers heats up, active fund managers are holding fewer stocks and trading them less often in order to differentiate themselves from passive funds.
Over the last four canada goose store years, the number of canada goose clearance sale holdings in canada goose uk shop the average stock fund worldwide declined by 7 percent to 85 companies, according to the study, while the number of securities that a fund either bought or sold declined by nearly 30 percent over the same time.
The drop off in activity is largely a reflection of the growing popularity of index funds and other forms of passive investing in which managers simply try to mimic the return of a benchmark index such as the Standard Poor 500, said David Levine, Nasdaq global head of investor relations and canada goose coats on sale analytics product management.
Levine conducted the study on behalf of companies who buy 2018 canada goose canada goose jacket cheap list their shares on Nasdaq and wished Canada Goose online to have more information about their shareholders, he said.
would argue that the decrease in turnover is Canada Goose Jackets indicating that managers are more focused on their styles and Canada Goose sale core value propositions, Levine said.
This canada goose uk black friday is aimed at distinguishing themselves from index funds exchange traded funds put out by firms such as the Vanguard Group and BlackRock Inc iShares line that have eaten into the market share of active funds, Levine said.
With fewer companies in their portfolios, managers are canadian goose jacket more likely to have returns that deviate from their benchmark.
As canada goose uk outlet a result, companies are canada goose black friday sale watching the number of active shareholders decrease as Canada Goose Online portfolio managers focus their https://www.canadagoosejacketca.ca bets on fewer companies and buy and sell Canada Goose Coats On Sale their shares less often. uk canada goose Approximately 35 percent of shares in General Electric Co, for example, are now held by passive funds, compared with 30 percent four years ago, Levine said.
The competition between active canada goose clearance and passive managers for investor dollars has cheap Canada Goose never been greater.
Since 2010, the percentage of investor dollars invested in actively canada goose coats managed funds has declined by canada goose factory sale 7 percent, to 76 cheap canada goose uk percent of total mutual fund assets, Levine said.
Passive funds, by comparison, now make up 24 percent of total mutual Canada Goose Parka fund assets, a jump of 34 percent from four years ago. Last year, passive funds took in $2 for every $1 sent to an actively managed fund, according to data from Morningstar.
The drop off in trading and the number of companies in fund portfolios coincides with the jump in the number of so called concentrated funds, those portfolios which include 30 or fewer stocks and are by definition not diversified.
Over the five years to December 2013, the assets invested in concentrated funds jumped from $44.5 billion uk canada goose outlet to approximately $117 billion, according to data buy canada goose jacket from Morningstar, a growth rate 67 percent greater than actively managed funds as a whole.