Finance Firms Navigate New Regulations
In a low interest rate environment, cheaper index funds will tend to outperform active managers. Markets don’t go up forever, but active managers will need to work harder to convince the investing public of the value they offer despite their steeper costs, and alternative managers will need to do a better job communicating the true value these funds provide to a skeptical public and media.
“Boomers and larger institutional investors, such as pension and endowment funds, as a general rule, aren’t comfortable receiving information about investing from social media,” Dukas continued. “However, the industry will need to grapple with the challenge of how to communicate to a more tech-savvy Millennial and GenY demographic, which is more comfortable with social media.”“Hedge funds and other alternative asset classes have generally under-performed compared to plain, ‘vanilla’ index funds, such as the SPDR 500,” Dukas said. “These index funds and ETFs are far less expensive than hedge funds, private equity and other alternative asset classes. Now more than ever, mutual fund companies and active managers need to communicate the value they offer investors, especially over the longer term.”
By Adrienne Jordan, May 11, 2017
Originally published on O’Dwyer’s