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Compass Financial Advisors

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Passive Investment Vehicles Have Posted The Strongest Asset Growth Since The End Of 2007

 View from the Observation Deck  

  1. This marks the seventh calendar year in which we have tracked the asset growth of the four major types of packaged products since the close of 2007 (prior to financial crisis in 2008-2009).
  2. The percentage change in the total assets invested in packaged products from 12/31/07 to 12/31/17 were as follows (chart): Exchange-Traded Funds (ETFs) (+459%); UITs (+60%); Mutual Funds (+56%); and Closed-End Funds (-12%).
  3. From 2016 to 2017, total assets in each of the four major types featured in the chart fluctuated as follows: ETFs ($2.5 trillion vs. $3.4 trillion); UITs ($85 billion vs. $85 billion); Mutual Funds ($16.3 trillion vs. $18.7 trillion); and Closed-End Funds ($262 billion vs. $275 billion).
  4. Last year, investors favored passive investing over active management. Data from Morningstar shows that estimated net flows to all "Active" long term mutual funds and ETFs totaled -$7 billion in 2017, while estimated net flows to all "Passive" funds and ETFs totaled $691.6 billion.
  5. We have noted in previous blog posts that some industry pundits have predicted that ETFs, in time, will supplant mutual funds as the most popular packaged product. We intend to continue monitoring. 

This chart is for illustrative purposes only and not indicative of any actual investment. 

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Latest Market News

 Stocks fell for the week as investors grappled with higher bond yields, political risks around the globe, trade tensions and higher energy prices. The real estate and utilities sectors, which tend to be bond proxies due to their high dividend yields, lost over 2% for the week. By contrast, the materials and energy sectors posted the biggest gains as investors are starting to price in higher inflation expectations. In economic news, retail sales rose 0.3% in April, in-line with forecasts, as higher paychecks from tax-cuts offset rising fuel costs. In stock news, both Walmart Inc.

 Treasury prices dropped moderately over the course of the week on strong economic data and speculation that both the Federal Reserve and European Central Bank may raise interest rates more quickly than previously expected. On Tuesday, April Advance Retail Sales were solid while March sales figures were revised to 0.8%, and May Empire Manufacturing was higher than expected, causing a risk-on environment which led to a significant drop in Treasury prices. It was also reported on Tuesday that the U.S.

 View from the Observation Deck  

Securities offered through Harbour Investments, Inc.,
member FINRA/SIPC. http://www.finra.org/
http://www.sipc.org/about-sipc

Investment Advisory Services offered through
Compass Financial Advisors, LLC,
a registered Advisor. 
Compass Financial Advisors, LLC &
Harbour Investments, Inc.
are separate entities.

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