Industry Updates

Are ETFs blowing bubbles? - News Roundup

David Tuckwell

ETFs the new vampire squid?

ETFs are at once a marketing gimmick and a bubble blowing device, a philippic in Forbes has argued. They allocate capital inefficiently and inflate share prices. Rather than reflecting markets, they reinforce existing power structures: Google gets artificially cheap capital because of ETFs, but start-ups and low cap companies rarely get any.

Another crazy ETF - Outsource your CIO

Crazy new ETFs have been in vogue of late. The latest is the Outsourced Chief Investment Officer, (OCIO) which is an active ETF that manages other ETFs. The fund holds 30 ETFs in total, most of which are run by Vanguard and iShares.

Half S&P will go passive - Fidelity

Half the S&P will be owned by passive funds within 12 months, the CIO of Fidelity has claimed. But with the rise of passive investing, standards of corporate governance need to improve, as passive funds do not apply pressures of oversights on boards.


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