In the last few years, passive index investing has grown significantly, as those involved in the investment business try to capitalise on the growing demand for alternative ways of building investment portfolios that bypass both the high fees incurred in active fund management and the knowledge (and money) required to build a well-diversified portfolio.
At the end of 2016, the assets under management of exchange-trade funds (ETFs) amounted to $571bn and $2.54tn in Europe and the US respectively. According to data released by the consultancy firm ETFGI, 90 per cent of net fund flows in the US in the past three years have been into passive funds. Many believe the industry will grow to $5tn in the US by 2020, which would see the ETF sector surpass the hedge fund industry.
Modern investors are like modern consumers: they do their homework before shopping. Informed individuals now have access to all the data they need in a centralised place: the internet. They are no longer willing to pay for full service. For this reason, and also because most hedge funds are unable to consistently beat the market, the ETF industry proliferated and expanded its offer of index investing.
Alba Minerals was listed on the AIM market more than 10 years ago as a mineral exploration company. About three years ago, Alba ventured into the oil and gas sector with an initial 5 per cent investment in the majority owner of the Horse Hill oil and gas project in the Weald Basin in Surrey, Horse Hill Developments Limited (HHDL).
by Swen Lorenz| 1 mins. to read There will be a lot happening at the Master Investor Show on 25 March, and everyone has their own reasons for attending. Still, I'd like to share some personal recommendations
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by Filipe R Costa | Equities | 7 mins. to read In the last few years, passive index investing has grown significantly, as those involved in the investment business try to capitalise on the growing demand for alternative ways of building investment portfolios.
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