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Learning, Sharing, and Teaching => Investor Alley => Topic started by: nobodyspecial on August 01, 2015, 09:50:12 AM

Title: ETFs overtake Hedge Funds
Post by: nobodyspecial on August 01, 2015, 09:50:12 AM
http://www.economist.com/news/finance-and-economics/21660169-exchange-traded-funds-have-overtaken-hedge-funds-investment-vehicle-roaring

The total ETF funds now exceed Hedge Funds and big investors are now switching to them.

The big surprise isn't that low cost ETFs do better then hedge funds in bull markets but also that they have done better than professionally managed flexible hedge funds in recent bear markets.
Title: Re: ETFs overtake Hedge Funds
Post by: forummm on August 01, 2015, 10:04:40 AM
What's the significance of this news? ETFs are mostly just mutual funds that can be traded. Mutual funds have long had more money invested in them than hedge funds. And hedge funds have long underperformed the market over time. Hedge fund defenders will say that hedge funds have different purposes and that some are great, etc. But low cost investing has been gaining ground for decades.
Title: Re: ETFs overtake Hedge Funds
Post by: nobodyspecial on August 01, 2015, 11:23:09 AM
Mustachians know this, but when $Bn university endowments and pension funds switch to just buying vanguard - the message may be extending a little.
The "news" is apparently that ETF funding is now for the first time greater than hedge funds - although the real story is probably the collapsein hedge funds after their dismal 2008/2011 performance
Title: Re: ETFs overtake Hedge Funds
Post by: forummm on August 01, 2015, 11:53:00 AM
CalPERS pulled all their money out of hedge funds ($4.5B) due to the huge fees they were being charged. Yes, the tide is turning.