Factor Investing:
Exchange Traded Funds (ETFs), Index Mutual Funds, & Indexed Separate Accounts

Recently Released!!!
Date Published: October 27, 2016
Summary Power Point Deck: 44 Slides
Reference Power Point Deck: 555 Slides

The purpose of this research is to provide readers with a comprehensive understanding of the index investing market, including exchange traded funds (ETFs), index mutual funds, & indexed separate accounts. The index investing market is growing rapidly, driven by many factors. BlackRock, The Vanguard Group, & State Street Global Advisors dominate the market. Other firms including Invesco PowerShares, WisdomTree, Guggenheim Investment Partners, & ProShares are developing alternative products. Still other firms including The Charles Schwab Corporation, PIMCO, & Fidelity Investments are challenging the leaders. This research summarizes the highlights of Tiburon's underlying research on exchange traded funds (ETFs), index mutual funds, & indexed separate accounts. This research fits within Tiburon's wealth management series, which includes a wide variety of trending topics.

This research starts by highlighting the index investing trend versus that of active investing, including: 

  • Companies by Investment Type
  • Products by Investment Type
  • Assets Under Management by Investment Type
  • Net Flows by Investment Type
  • Revenues by Investment Type
  • Net Profits by Investment Type

This research then summarizes the key drivers behind the rapid growth in index investing, including: 

  • Modern Portfolio Theory & Asset Allocation
  • Difficulty in Beating Market Returns
  • Lower Expense Ratios
  • Better Tax Efficiency

This research addresses the four historical phases of the index investing market, including: 

  • Indexed Separate Accounts Emergence Phase
  • Index Mutual Funds Emergence Phase
  • Exchange Traded Funds (ETFs) Emergence Phase
  • Exchange Traded Funds (ETFs) Dominance Phase

    This research defines three product markets, including:

    • Exchange Traded Funds (ETFs)
    • Index Mutual Funds
    • Indexed Separate Accounts

And this research makes the following future predictions for the index investing business, including: 

  • Substantial Growth in Index Investing
  • Substantial Growth in Factor Investing
  • Substantial Growth in Smart Beta Products
  • Moderate Growth in Leveraged & Inverse Funds
  • Reemergence of Personalized Indexing
  • Increased Focus on Cost in Actively Managed Products Market
  • Growth in Actively Managed Concentrated Managers
  • Substantial Venture Capital Investments in Indexing Market
  • Active Mergers & Acquisitions Market in Indexing Market
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