Among mutual funds, index funds stand out because they follow a passive management style. Index funds aim to replicate the returns of an index regardless of economic and market conditions.
In return for investing a client’s money, mutual funds charge a fee, generally an annual fee set as a percentage of the client’s assets. This fee is the only source of income for a mutual fund-focused asset manager.
There are investors who are willing to take on higher risk to generate above-average market returns. For these investors, active funds offer the optimal investment avenue.
Globally, mutual fund assets totaled approximately $30 trillion at the end of 2013. The US accounted for $15 trillion of this amount, or 50%, making it the world’s most important mutual fund market.
From a minuscule $34 billion contribution to the industry at the beginning of 1999, ETFs have grown an amazing ~50 times in the last 15 years to become a $1.7 trillion industry.
Audited and verified annual figures at the end of 2013 indicate that total assets under management of US registered investment companies equalled nearly $17.1 trillion.
The efficient market hypothesis maintains that the market prices everything correctly and so it isn’t possible to outperform the market in the long run.
Active asset management refers to those asset managers that essentially try to outperform the average market return, a benchmark, or a hurdle rate that may have been set internally.
Sometimes the term “asset management” is also used to denote the upkeep of a plant, machinery, or equipment in order to generate better returns.
The healthcare sector (XLV) has seen the most M&A deals. It’s followed by telecom and real estate (VNQ). Increased cash flows could have brought about more M&A deals.
Provides investment banking and commercial banking services
Operates as a holding company, which engages in focused on vehicle finance and unsecured consumer lending products
Operates as a bank holding company whose subsidiary provides banking services
Unconstrained bond funds can invest anywhere in the world. They can have simultaneous positions in both high-yield and investment-grade bonds, government and corporate, or fixed and floating rate bonds.
Investor interest in these funds is strong. Unconstrained bond funds offer options for managing fixed income risks, without being shackled by index constraints.
The U.S. ETF market is huge. It also dominates overall ETF trading activity. The U.S. market share came close to 89%, or $14 trillion. It was up 7.7% since 2012.
The U.S. market dominates the global ETF space, with ~72% of global ETF assets. The dominant ETF issuers in U.S. include BlackRock (BLK), State Street Corp. (STT), and Vanguard.
In two of the most important parameters of returns—return on assets and return on average common equity—Wells Fargo consistently beats its peers. It has a very low volatility.
Management sets the vision for an organization. Wells Fargo’s vision is large, but it’s already halfway there. Wells Fargo is the largest bank in the U.S.—by market capitalization.