A Penny for your Stock Thoughts

Posted in Wealth Headlines
Next Post
Previous Post

Meet the world’s top stock pickers – and they don’t manage a penny

Link: Meet the world’s top stock pickers – and they don’t manage a penny

Note: The online version has extra extra extra paragraphs of coverage relative to the newsprint version I have

Extract1: Yet thanks to the surging popularity of passive investing, MSCI and a handful of its rivals – including FTSE Russell and S&P Dow Jones Indices – are quietly replacing the giants of money management as the most important arbiters of where the world’s stock investments flow. The average proportion of equity funds in the United States, Europe and Asia that mimic index providers’ security and country allocation decisions has doubled over the past eight years to about 33 per cent, according to Morningstar Inc.

Extract2: Index providers aren’t stock pickers in the same sense as active money managers, who attempt to beat the market by choosing only the best securities. Most of the criteria used by MSCI and its peers are measures of investability, such as market capitalization and daily volume, rather than anything purporting to generate above-average performance.