X

Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.


Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Will the Biggest Financial Innovation Kill Stockpicking? - Views on News from Equitymaster
  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  
The Equitymaster Research Digest

Will the Biggest Financial Innovation Kill Stockpicking?
Sep 14, 2016

Back when I was doing my MBA, Paul Samuelson's Economics was a big hit. I rarely saw any of my batch mates taking notes from anybody else. To me, Samuelson has always this very famous and and influential economist.

It was only recently that I came to know just how influential he is. But before we get to that, a short detour...

The Mutual Fund Colossus

Here's an astonishing statistic from The Wall Street Journal.

During the year ended May 31, the US mutual fund industry collected a total of US$87 billion. Of that, a whopping US$224 billion came into one fund house alone. This means the fund house's competitors suffered a massive outflow of US$137 billion.

Mind you, this is not a one off.

It appears as if the US mutual fund industry, with the exception of one fund, is liquidating itself. And almost all that money is flowing into this one mutual fund colossus. At last count, this colossus, on behalf of its 20 million investor-clients was holding more than US$3 trillion in mostly passively managed funds, i.e. index-style investments.

You can probably guess the name of the fund house. It's become synonymous with index funds. I am indeed referring to the passive investing behemoth Vanguard.

To Read the Full Story, Subscribe or Sign In


Become A Smarter Investor In
Just 5 Minutes

Multibagger Stocks Guide 2017
Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
We will never sell or rent your email id.
Please read our Terms

MARKET STATS