The Fairtree Monthly Market Insights provide our clients with a brief summary of the diverse and affluent range of solutions we offer. "Monthly Insights" focuses on the performance of our solutions and provides you with a summary of the general market performance.
Click here to download our latest Monthly Market Insights (31/12/2016)
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Chatting Markets with Jean Pierre Verster on justonelap.com. Listen to the podcast here.
NOT ALL INVESTMENT FEES ARE EQUAL
(Chief Investment Officer)
“Price is what you pay. Value is what you get.” - Warren Buffet
Over the last decade, there’s been an increased vocalisation of investors’ concerns about the cost associated with investing. This concern has stemmed partly from the growing income disparity evident in society, which was epitomised by the Occupy Wall Street movement which started in Manhattan in September 2011. The Occupy movement sought to highlight the inequality in society, but unfortunately six years later has all but disappeared. The tragedy is that the extent of income disparity remains a socio-economic issue which requires resolution and may well have been the undercurrent which has been surfed by populist political agendas in the last year. A further driver of this investor focus on cost has been the dearth of excess return or alpha amongst active managers. As a result investors responded by moving “en masse” into passive beta products, which offered market exposure at a discount to traditional active management fees. Since this initial response, passive ETF (exchange traded fund) flows have exploded. Deutsche Bank estimates that global ETF AUM has increased to US$3.5 trillion in 2016 from just over US$500 million in 2006 (See chart below - click to enlarge).
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THINGS YOU DIDN'T KNOW ABOUT JEAN PIERRE VERSTER
An interview with Jean Pierre Verster in the Financial Mail, 9 February 2017. Read it here.