Tags: ETF | hedge fund | stocks | bonds

WSJ: ETFs Have $1 Trillion More Than Hedge Funds

WSJ: ETFs Have $1 Trillion More Than Hedge Funds
(Dreamstime)

By    |   Tuesday, 01 August 2017 10:32 AM

Exchange-traded funds that buy baskets of securities and trade like stocks now hold $1 trillion more of investor money than hedge funds.

ETFs have gotten a significant boost from record highs in the stock market, The Wall Street Journal reported. The S&P 500 stock index has risen 14 percent in the past 12 months, hitting a record high of 2,484.05 on July 27. The Dow Jones Industrial Average has climbed 19 percent in the past year, hitting a record of 21,988.34 on Tuesday.

Assets in ETFs first surpassed hedge funds two years ago and have continued to swell, the newspaper reported.

Hedge funds, some of which charge a 2 percent management fee and collect 20 percent of any gains, have underperformed the market this year. Research firm HFR’s index of hedge fund performance has gained 3.7 this year, compared with a 10 percent return for the S&P 500.

“Wealth advisers increasingly are shifting client assets into portfolios filled with ultracheap funds for which they charge a fee,” according to the WSJ. “Cost-conscious institutional investors have taken money out of hedge funds and allocated more to funds that match the performance of broad swaths of the market.”

ETFs throughout the world attracted a net $347.7 billion in net new assets, according to consulting firm ETFGI. Hedge funds attracted a net $1.2 billion, according to HFR. Hedge funds outnumber ETFs by more than 1,000 globally.

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Exchange-traded funds that buy baskets of securities and trade like stocks now hold $1 trillion more of investor money than hedge funds.ETFs have gotten a significant boost from record highs in the stock market, The Wall Street Journal reports. The S&P 500 stock index has...
ETF, hedge fund, stocks, bonds
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2017-32-01
Tuesday, 01 August 2017 10:32 AM
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