ECONOMIC SILUET: Is the increasing influence of indexing here to stay?

Jumat, 13 Agustus 2021

Is the increasing influence of indexing here to stay?

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FRI, AUG 13, 2021

YOUR WEEKLY UPDATE ON TOP ETF TRENDS

A NOTE FROM BOB

I've said it many times — indexing is coming to dominate the investment world, and that means the people who control what goes into those indexes are increasingly influential. Join me Monday at 1 PM ET for ETF Edge — I'll be joined by Dan Draper, Chief Executive Officer at S&P Dow Jones Indices, which publishes thousands of indexes, but most importantly, decides what companies go into the Dow Jones Industrial Average and the S&P 500.

Also joining us is Tom Lydon from ETF Trends, who recently sold his firm to Alerian. From him we'll learn more about indexing, ESG, cryptocurrency indexing, trends in factors/thematics indexing, as well as active vs. passive on ETF Edge this Monday!

Now that SEC chair Gary Gensler has signaled his preference for a bitcoin futures-based ETF, there has been a recent flood of those applications coming into the SEC.

The mutual fund industry is poised to lose its crown as the dominant passive investment vehicle. Global assets under management of passive, index-tracking ETFs hit a record $8.66 trillion at the end of June, according to data from Morningstar — just $132 billion shy of those in passive mutual funds, Financial Times reports.

JP Morgan is joining Dimensional Funds in announcing that the company is converting four mutual funds to an ETF format, beginning in 2022.

If you ever had any doubts about whether market timing is successful, just look at what has been happening to the iShares Momentum (MTUM) ETF, which rebalances twice a year and seems to be behind every move. The market is moving up, so MTUM is performing well, but as Jack Bogle used to say, with market timing you have to be right twice (going in and going out), which is just about impossible over the long run.

For more analysis and actionable insights, catch me live on Mondays at 1 PM ET on ETF Edge.