Industry Updates

Portfolio pumping: another reason to switch to ETFs

David Tuckwell

Proof that active managers pump portfolios

Portfolio pumping is a manipulation strategy that active managers use to artificially inflate the performance of their portfolios. They do this by buying lots of stocks they already own, preferably small stocks, which are cheap and easy to drive up the price. That managers do this has been street knowledge for years. But now there is also scholarly evidence backing it up.

Schwab launches first new ETF in four years

Schwab is the Aldi of ETFs, known industry-wide for their cost cutting and under-pricing. Schwab is launching its first new ETF in four years, tracking a home-made index, the Schwab 1000 Index. The index is made in-house to help keep costs low.

Smart beta ETFs busts small cap overvaluations

Small cap stocks tend to have higher valuations than large caps. But a new smart beta ETF by Legg Mason aims to solve this problem. Through a partnership with Royce & Associates, a research firm specialising in small caps, the company aims to pick low-value small caps.


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