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It may make regular trading more profitable, but most asset managers are paid for getting more assets under management, not their fund's profits. So siphoning
by smallnamespace 10y ago
It may make regular trading more profitable, but most asset managers are paid for getting more assets under management, not their fund's profits.
So siphoning money away to index funds does put a direct crimp on active managed fund managers' compensation.
- mysterypie 10y ago> asset managers are paid for getting more assets under management, not their fund's profits. I've always wondered why they aren't paid a percentage of profits? That would align their interests with the customers'.
- janpieterz 10y agoOr even a percentage that increases by the percentage of profit.
- OscarCunningham 10y agoThey're generally paid both. They often charge "two and twenty" meaning 2% yearly of the assets under management and 20% of the profit. (Of course they don't absorb 20% of the losses in a bad year)
- smallnamespace 10y agoThat's only hedge funds, which are a small fraction of total fund capitalization.
- OscarCunningham 10y agoWhat are the percentages of the market occupied by different fund types? Where would I go to look that up?
- smallnamespace 10y agohttp://www.hedgefundfacts.org/hedge/wp-content/uploads/2009/09/Hedge_Funds.pdf http://www.hedgefundfacts.org/hedge/wp-content/uploads/2009/... Page 4 "Hedge funds as a percent of total: 1.1%"