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This is true only to a certain extent. Mutual funds have been getting squeezed and the impact, though not immense, trickles down to millions of middle class inv
by prklmn 10y ago
This is true only to a certain extent. Mutual funds have been getting squeezed and the impact, though not immense, trickles down to millions of middle class investors.
- tptacek 10y agoNo. The opposite is true. Vanguard, one of the largest and beyond a doubt the most trustworthy mutual fund complex, is on the record repeatedly as saying HFTs have lowered their cost of trading. Where did you get your claim from? I can source mine, if you really need me to.
- fma 10y agoThen source it...
- kasey_junk 10y agohttp://www.cnbc.com/2014/04/25/vanguard-chief-defends-high-frequency-trading-firms.html http://www.cnbc.com/2014/04/25/vanguard-chief-defends-high-f...
- rrrrsss99 10y agoVanguard runs etfs mostly, so I'm not sure why they care about support small spreads since they probably do a lot of efp trades (I'm not sure how the underlying prices are determined, but I think they can convert at a set price). The mutual funds and hedge funds who are more fundamental will try and buy or sell large blocks, so they're more affected by adverse market moves from trying to dump $1M of apple. I could see VG's attitude change a little since there are more traders engaged in rebalancing arb. If you know that the S&P index has to allocate more money to a certain stock, you can buy it ahead of time and sell to VG for a slightly higher price. If you're a passive fund with $1B in an etf, everyone knows what you're obligated to do. It's basically stat arb with higher probability. I still buy VG funds though
- tptacek 10y ago"Vanguard runs ETFs mostly"?
- kchoudhu 10y ago> Vanguard runs etfs mostly Is there a socially acceptable way to call a person an ignoramus on HN?
- tome 10y agoSorry, what's ignorant about that?
- tptacek 10y agoVanguard has something like three trillion dollars under management, only 450Bn of which are ETFs. Vanguard is not the largest ETF provider, but has long been the #1 mutual fund provider. Anyone who rebuts an argument about Vanguard's role in the mutual fund industry by saying "Vanguard mostly runs ETFs" doesn't know what Vanguard is.
- tptacek 10y agoNo.
- prklmn 10y agohttp://papers.ssrn.com/sol3/papers.cfm?abstract_id=2330053&download=yes http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2330053&d...
- brianwawok 10y agoI only invest in index funds. I do not day trade. I am all for HFT and a liquid market.
- airza 10y agoNo, the exact opposite happened, narrowing the spread is super favorable to mutual funds http://www.cnbc.com/2014/04/25/vanguard-chief-defends-high-frequency-trading-firms.html http://www.cnbc.com/2014/04/25/vanguard-chief-defends-high-f...