Fund Fees, Already Driven to Zero, May Have Farther to Fall

A recent New York Times article reports that “something mind-boggling in on its way” with respect to investment fees, which it says “have dropped so low that you may have assumed they have gone a far as they can.” According to research conducted by the firm Flowspring, major companies will soon be paying customers to invest with them. “As we’ve learned from interest rates, zero is a psychological barrier, not a real one. The fund… Read More

A New Generation of Hedge Funds

Ralph Arndt, CIO of Australia’s Future Fund, an A$166 billion ($125.3 billion) sovereign wealth fund, sees hedge fund investment as a “necessary tool to help reduce risk while providing uncorrelated returns,” according to a recent article in Chief Investment Officer. Arndt has so much faith in his strategy, the article reports, that he has more than 15% of the portfolio in hedge funds, exposure which he says serves to reduce risk, “and in particular to… Read More

The Former CEO of Alliance Bernstein on Pay-For-Alpha Fee Structure

A recent Bloomberg article recounts an interview with Peter Kraus, the former CEO of Alliance Bernstein and the man who advocated for performance-based fees for fund managers. While Morgan Stanley analysts say that a pay-for-alpha system would halve (if not eradicate) the profits of some active managers, the article argues, “the other way of looking at it is that customers would save a ton of money they currently pay in fees.” Here are some highlights… Read More

BlackRock’s New Suite of Funds to be Led by Robots

Blackrock Inc., the world’s largest asset manager, is “turning to robots to drive its latest push into active exchange-traded funds,” according to a recent article in Bloomberg. The article reports that, according to a recent statement by the firm, the funds (under the brand “iShares Evolved”) will choose holdings in industries such as technology, innovative health care and media entertainment based on machine learning and natural language processing. According to Jeff Shen, co-head of investments… Read More