Posts filed under “Index/ETFs”

I wanted to spend a bit of time on the Labor Department’s proposal to place a fiduciary obligation on those who manage or provide investment advice on retirement plans. These include individual retirement accounts and 401(k)s (including 403(b)s). The new rules require the broker or adviser to “operate in the best interest of the client.”

I don’t want to rehash all of the reasons why this is a very good idea — I did that last year in an article with the headline “Find a financial adviser who will put your interests first.” Instead, I want to explain why fiscal conservatives should rally around this idea as a way to hold down taxes.

I first discussed the lack of a fiduciary duty in 2013. The context was a proposal in the U.K. that was going to cap retirement-plan fees. Those rules were passed, and starting in April, annual charges on British workplace pension plans with automatic enrollment are capped at 0.75 percent.

The conservative ruling party in the U.K. did this to save future taxes, as you will see below.

The proposed fiduciary rules are not an explicit fee cap, but they would require that “any fees and costs paid by the client be reasonable for the services provided.” It is probable that the “best interests of investors” will mean athat fees will be reduced from today’s often-excessive levels. If you doubt this, then perhaps you might explain why Wall Street has spent millions of dollars lobbying against the fiduciary standard. They KNOW just what the net result will be — lower fees to brokers and advisers.

 

Continues here

 

 

 

Category: Index/ETFs, Investing, Mutual Funds, Really, really bad calls

How Passive Funds Changed Investing

Fantastic explanatory from the FT on the history of passive investing:   click for ginormous infographic Source: FT

Category: Digital Media, Index/ETFs, Investing

John Bogle on the Rise of Index Funds

The founder of Vanguard explains why his invention is winning the battle for assets. Plus: The problem with ETFs, and why we need a transaction tax.

Category: ETFs, Index/ETFs, Investing, Video

Vanguard: Has Indexing Gotten Too Big?

Category: Index/ETFs, Investing, Think Tank

How the Dow S&P500 Has Changed

  S&P Closes Above 2,000 for First Time Source: WSJ

Category: Index/ETFs, Markets

Masters in Business: Rob Arnott of Research Affiliates

Rob Arnott turned the world of passive index investing upside down. Best known for creating “smart beta,” Arnott creates models weighted b y four factors: Sales, profits, book value and dividends. Market cap is not relevant to him. Funds running Arnott’s models manage about $200 billion dollars in smart-beta strategies. Assets have increased by 59…Read More

Category: Financial Press, Index/ETFs, Investing, Psychology

How Much Do S&P500 P/E Ratios Vary Historically?

Source: Bespoke Investment Group   How expensive are stocks? Its a question that seems to beget many different answers. Too often, the response reflects the responder’s investment posture. If they are long equities, they typically respond by saying “Not very.” If they are short, or in cash or in other risk assets, the answer is…Read More

Category: Index/ETFs, Investing, Markets, Valuation

The DJIA’s 22,000 Point Mistake

The Dow Jones’s 22,000 Point Mistake Bryan Taylor, Ph.D., Chief Economist, Global Financial Data One of the long-term components of the Dow Jones Industrial Average has been IBM. The company was originally added to the Dow Jones Industrials on March 26, 1932 in a reshuffle involving eight stocks including Coca-Cola, Nash Motors (later American Motors)…Read More

Category: Index/ETFs, Investing, Markets

Robotics Industry Taxonomy

Source: Myria Research

Category: Index/ETFs, Investing, Science, Technology

Active Fund Winners? Emerging Markets Small-Cap Funds

Twice a year, S&P releases a “SPIVA Scorecard” – a report comparing the performance of Active Managers versus three passive indices. The S&P 500 large caps, S&P MidCap 400, and S&P SmallCap 600 are pitted against the median returns of active managers. In the most recent report, the trailing 12 months returns for these indices…Read More

Category: Apprenticed Investor, Index/ETFs, Investing