Weekly Highlights

Weekly Highlights 15 Dec: Passive investing to push US ETF asset over $50 trillion by 2030?

#1 BOA predict ETF asset to surge to $50t by 2030

The current size of the US ETF assets stands at $4.3 trillion, of which more than $3 trillion are invested in index-tracking ETF, i.e. passive investing. If the market continues to grow at its current rate, the US ETF asset is expected to hit $50 trillion by 2030.

Passive investing will continue to grow in popularity as investors become less confident in stock pickers. The sad and harsh reality is that most active funds underperform their benchmarks.

https://www.cnbc.com/2019/12/12/etf-assets-to-surge-tenfold-in-10-years-to-50-trillion-bank-of-america-predicts.html

https://www.etf.com/sections/weekly-etf-flows/weekly-etf-flows-2019-12-12-2019-12-06

 

#2 Does the team of 3 outperform the market?

In a nutshell, according to the researchers, a team of 3 fund managers outperform solo manager by an average of 0.58% a year. Furthermore, a team size of 3 beats any other team size in terms of its performance.

It would seem that a team of 3 fund managers would have a higher probability of beating the benchmark than a solo manager.

In reality, is this really the case?

https://www.cnbc.com/2019/12/12/if-you-want-to-be-a-market-beating-investor-find-two-partners.html

For more information on active managers’ performance, check out: SPIVA: Doomsday for active fund managers?

 

#3 Did Trump succumb to the pressure from the stock market?

Major US indices hit a record high as the US and China announced a trade deal, i.e. the US has agreed to suspend the $160 billion tariff on Chinese goods that are supposed to take effect on Dec. 15.

Looks like the party will continue to rally!!!

https://www.reuters.com/article/us-usa-stocks/wall-street-steady-as-u-s-china-announce-trade-deal-idUSKBN1YH1D1

https://www.cnbc.com/2019/12/13/goldman-is-disappointed-in-trade-deal-tariff-rollback-smaller-than-expected.html

 

 

Have a good week ahead.

 


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