Investment Advisories Are Easing Up On Their Social Media Usage Restrictions
Investment Advisories Are Giving Up The Battle Against Social Media Usage (InvestmentNews)
According to a new survey, 83% of firms have adopted written policies on social media usage, up from 80% last year and up from 43% in 2010.
However, attitudes toward social media usage are actually becoming more relaxed.
"The number of firms prohibiting the use of social media -- such as Facebook, Twitter and LinkedIn – has declined to 49% this year," writes Mark Schoeff Jr. for InvestmentNews. "That's down from 54% in 2012."
"The survey suggests that firms are giving up the battle to keep social media out of their shops," says Schoeff Jr. "Instead, they're loosening strict bans and allowing more use with appropriate policies and procedures in place, according to Laura Grossman, IAA assistant general counsel."
Hedge Funds Are Basically Long The S&P 500 (ValueWalk)
The correlation between hedge fund returns and the S&P 500 is approaching 90%, as Morgan Stanley's Adam Parker highlights in a recent client note.
"Basically, investors are paying 2/20 to buy a closet index fund," writes ValueWalk's Jacob Wolinsky. "Although there is no explanation given, the rise in correlation is likely due to the macro dominated news atmosphere ... This makes it an especially tough environment for value investors who have lamented in the past few years that investors have been ignoring fundamentals."
Why Clients Fire Financial Advisors (Investopedia)
Clients typically fire financial advisors for a number of reasons: poor performance, poor communication, or a poor understanding of the client's needs.
"I'd go to these meetings with them and it was all pie charts and mumbo jumbo about portfolio diversification, investment horizons and technical stuff," says Rita Gunther McGrath, an? Associate Professor? at the Columbia University Business School. "What I needed (and eventually found) was someone to relate the financial side of life to ... well, life! Things like what our goals are, what are the big decisions that need to be made, have you taken care of your estate plans, can you get my husband and I in a room to have sometimes-difficult conversations, that sort of thing."
(McGrath ended up firing her advisor.)
Vanguard Suffers Its First Firmwide Outflow Since 1994 (Morningstar)
In June, leading mutual fund provider Vanguard saw its assets under management shrink by $432 million, representing the first monthly decrease since the bond market rout of 1994. However, the firm still increased its market share in June, as industry assets declined at a faster rate.
"The outflows at Vanguard were driven by a $7.4 billion outflow from the firm's taxable bond funds and a $2.5 billion outflow from municipal bond funds," write Morningstar fund analysts. "Industrywide, those two category groups had outflows of $68 billion."
ETFs Can Add Another Layer Of Volatility For Investors During Market Sell-Offs (Bloomberg)
Exchange traded funds have proliferated on Wall Street in recent years as convenient vehicles for investing in a wide range of assets and markets. However, the use of ETFs can be a headache for investors looking to avoid volatility.
Bloomberg's Alexis Leondis and Christopher Condon report that during the emerging markets sell-off – honing in on the period from May 22 to June 24 – "share prices for the 10 largest diversified emerging-market ETFs on average were 42.6 percent more volatile than their underlying indexes," while the five biggest mutual funds were only 4.8% more volatile than their indices.
"Providers say the excess volatility reflects the fact that the funds provide prices and liquidity at a time when the underlying markets are closed or illiquid, which is ultimately beneficial for investors," write Leondis and Condon. "While the price swings have little impact on long-term investors, excess volatility can spur bigger losses if clients trade in times of market turmoil."