Charles Schwab Corp. announced recently that it would eliminate trading commissions for retail investors, making Schwab the latest Wall Street broker to embrace the push to zero commissions. But with $3.75 trillion in assets, Schwab is in a position to make such an aggressive move. Like other larger retail e-brokers, Schwab is capitalizing on its scale ... READ MORE >
Passive investing reaches a milestone, surpassing value of active counterparts
For years a profound shift has been taking place in the financial community as individual investors have increasingly favored a passive, low-cost approach over the traditional actively traded assets. Last year, that shift reached a significant milestone as the value of assets under passive management surpassed the value of active investing assets. For ... READ MORE >
Public scrutiny over ESG holdings will cause universal reporting change
As environmental, social and governance investing continues to grow in popularity, investors need to carefully evaluate how their holdings will be viewed by the public. Asset managers must balance their desire to promote ESG consciousness with their fiduciary duty to drive financial returns. ESG funds under management increased to $60 billion through June ... READ MORE >
For private equity funds, bigger is not always better
The rise of billion-dollar private equity buyout funds reflects the growing demand from large investors willing to write big checks. Interest rates remain historically low and, with additional rate cuts almost certain to come, investors continue to expect high returns. The larger the fund, so the thinking goes, the larger the return. This may not be the ... READ MORE >
BDCs’ popularity unlikely to be slowed by recent Fed rate cut, but headwinds remain
Business development corporations are unlikely to lose their momentum in the near term, despite last week’s interest rate cut by the Federal Reserve and the ongoing trade conflict with China. BDCs—the companies that invest in financially distressed small to medium-size private businesses—have yet to be affected by lower rates, which makes corporate bank ... READ MORE >
Crowdfunding proves to widen the reach of companies seeking early-stage capital
In the past, companies looking for alternative funding would have tried their luck with venture capital and private equity firms. But the advent of crowdfunding—which offers Main Street investors the ability to make equity investments in growing businesses—has given some companies a boost they might not have gotten from using the typical sources. The ... READ MORE >
Managers fear heavy costs following SEC’s proposed fund-of-funds rule change
A proposed federal rule would expand the ability of investment funds to boost their portfolios in other funds. But critics say it would require significant fund restructuring by the funds and burden investors. Under the Investment Company Act of 1940, the new Securities and Exchange Commission rule is intended to enhance the regulatory framework applicable ... READ MORE >
Rising interest rates seen causing asset managers to recalibrate
Policymakers believe the economy is on a strong footing, but the pace of rate increases going forward remains uncertain, and the effects on asset management could be significant. The Federal Open Market Committee is set to meet on Dec. 19, and an interest rate increase of 25-basis-points appears to be 75 percent likely, according to Bloomberg analysts. ... READ MORE >