Monday, July 12, 2021

Old School Investing Ain’t Dead Yet

Passive investing rules. Mutual funds have become musty relics. Right? 

Not yet. Not by a long shot 

Index funds tracking the S&P 500 have grown at warp speed. By the end of 2020 they held assets totaling $5.4 trillion. Yet significantly more, over $8 trillion, is invested in actively-managed funds benchmarked to the S&P 500. Investor hopes spring eternal.

As for old-fashioned mutual funds, the WSJ reports  fund assets total some $21 trillion, far exceeding the $6.2 trillion in ETFs.  

In time he old order will indeed give way to the new. Already, early adopters are bypassing ETFs and turning to non-fungible tokens and cryptocurrencies. Reminder: if clients want to wager on crypto, make sure they consult their astrologer.

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