Market Ethos - April 24th, 2017

The Herd

 

There is rising evidence passive investing, mainly from ETFs, is changing the structure of the markets. We believe this is suppressing disparity between returns of individual equities.  In this report we also share some analysis indicating the timing of ETF purchases / sales suffer from the same performance chasing behavior as evident in the mutual fund world.  Providing more evidence investors should adopt a more systematic approach for the timing of transactions and suppress their feelings.