The Problem for Active Management Isn't Indexing

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Dead Man Walking
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The Problem for Active Management Isn't Indexing

Post by Dead Man Walking » Thu Sep 13, 2018 3:35 pm

The Problem for Active Management Isn't Indexing according to a recent Rekenthaler Report.

https://www.morningstar.com/articles/88 ... exing.html

Thesaints
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Re: The Problem for Active Management Isn't Indexing

Post by Thesaints » Thu Sep 13, 2018 3:43 pm

Read the article just the other day. It seems to me the author does not realize that "professionally managed assets" does include index funds.

Dead Man Walking
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Re: The Problem for Active Management Isn't Indexing

Post by Dead Man Walking » Thu Sep 13, 2018 7:54 pm

Thesaints wrote:
Thu Sep 13, 2018 3:43 pm
Read the article just the other day. It seems to me the author does not realize that "professionally managed assets" does include index funds.
The author quoted a Blackrock study about index mutual funds, ETFs, and active funds. Since Blackrock sponsors iShares ETFs, I'm pretty sure that they know that index funds are professionally managed assets. Their study indicates that only 28% of equities are held by index funds, active funds, and ETFs.

The proliferation of CFAs is an interesting development. Bogleheads probably aren't a factor in this dramatic increase in advisors.

DMW

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Phineas J. Whoopee
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Re: The Problem for Active Management Isn't Indexing

Post by Phineas J. Whoopee » Thu Sep 13, 2018 7:55 pm

The problem for active management is the costs matter hypothesis.
PJW

Richard1580
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Re: The Problem for Active Management Isn't Indexing

Post by Richard1580 » Thu Sep 13, 2018 8:07 pm

Dead Man Walking wrote:
Thu Sep 13, 2018 7:54 pm
Thesaints wrote:
Thu Sep 13, 2018 3:43 pm
Their study indicates that only 28% of equities are held by index funds, active funds, and ETFs.
Now that is interesting. I can't help but wonder what the breakdown of the other 72% is. Provided the numbers are accurate.

Thesaints
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Re: The Problem for Active Management Isn't Indexing

Post by Thesaints » Thu Sep 13, 2018 8:15 pm

Stocks not held through funds are held individually.

Dead Man Walking
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Re: The Problem for Active Management Isn't Indexing

Post by Dead Man Walking » Thu Sep 13, 2018 11:50 pm

Richard1580 wrote:
Thu Sep 13, 2018 8:07 pm
Dead Man Walking wrote:
Thu Sep 13, 2018 7:54 pm
Thesaints wrote:
Thu Sep 13, 2018 3:43 pm
Their study indicates that only 28% of equities are held by index funds, active funds, and ETFs.
Now that is interesting. I can't help but wonder what the breakdown of the other 72% is. Provided the numbers are accurate.
I can't verify Blackrock's statistics; however, you have pointed out what I found fascinating about the article. The inequality of the distribution of wealth reported by the mainstream media may explain where the other 72% exists. How it is invested is another story. The Battle for the Soul of Capitalism by John C. Bogle may provide some insight into the remaining 72%. This site never discusses this book by Saint Jack, which in my opinion is his greatest work after The Little Book of Common Sense Investing.

DMW

texasdiver
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Re: The Problem for Active Management Isn't Indexing

Post by texasdiver » Fri Sep 14, 2018 11:39 am

Thesaints wrote:
Thu Sep 13, 2018 8:15 pm
Stocks not held through funds are held individually.
Or pensions, trusts, sovereign wealth funds, endowments, and foundations. There are many institutional investors that aren't mutual funds.

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