The FSA Spy market buzz – 4 October 2024
Schroders is hiring, Federated Hermes warns on PE exits, Fidelity thinks China is cheap, Pictet likes, gold and emerging markets, S&P 500 dividend woes, October’s volatility and much more.
Data: FE, Morningstar, US dollars
There are big differences in sizes among the seven ETFs. The largest, the ChinaAMC ETF has $1.68bn in AUM. Two other funds with substantial assets are: the BOC HK Wise ETF, with $367m, and the DB x-Trackers Ucits ETF with $352m of AUM.
The smallest, the C Shares ETF had only $1.6m of assets in October, while the remaining three were in the $20m-$30m range.
“In general, if the ETF is small in size, the fixed costs can actually add up,” Choy said, negatively affecting the fund’s performance. The fixed costs, which are reflected in the ETF’s total expense ratio (TER), include listing fees and auditor fees, among others, Choy noted.
The poor performance of the C Shares ETF, the smallest in our sample, can likely be attributed to the effect of fixed costs eating into the value of the portfolio. While many other factors play a role, we observe that the largest fund, the China AMC ETF, had a low tracking error, delivered the best three-year performance and placed third out of seven in the one-year return ranking.
Schroders is hiring, Federated Hermes warns on PE exits, Fidelity thinks China is cheap, Pictet likes, gold and emerging markets, S&P 500 dividend woes, October’s volatility and much more.
Part of the Mark Allen Group.