ZBB 2016, 406

RWS Verlag Kommunikationsforum GmbH, Köln RWS Verlag Kommunikationsforum GmbH, Köln 2199-1715 Zeitschrift für Bankrecht und Bankwirtschaft ZBB 2016 AufsätzeWolfgang Bessler* / Heinz J. Hockmann**

The Growth and Changing Role of Passive Investments: A Critical Perspective on Index Mutual Funds and Exchange Traded Funds

Index Mutual Funds (IMF) and Exchange Traded Funds (ETF) have developed into widely-accepted and fast growing passive investment instruments, offering investors a low-cost investment alternative in well diversified portfolios. Allocating more into IMFs and ETFs is the investors’ natural response to the experience with and the disillusion about actively managed investment performance. Despite these positive effects, this shift in fund allocation raises substantial concerns about possible negative effects on securities market trading and market quality, on corporate governance and product market competition as well as on systemic risk. Most research so far does not provide significant evidence of negative effects on market quality, on securities market trading, and on systemic risk. Whether the shareholdings of IMF ZBB 2016, 407and ETF providers reduces product market competition and whether the concentration of voting rights negatively effects corporate governance requires further analysis. Some problems may occur if ETF and IMF providers team-up with active investors. Overall, the introduction of IMFs and ETFs on broad market indices should be viewed as a financial innovation that broadens the investment spectrum providing many benefits to investors especially when viewed relative to the meager performance and performance persistence of actively managed mutual funds.

Table of contents

  • I. Introduction
  • II. Historical Perspective and Legal Environment
    • 1. Historical Perspective
    • 2. Legal Environment and Economic Perspective
  • III. Market Developments
  • IV. Physical versus Synthetic Replication of ETFs and Relevance of Tracking Errors
  • V. Passive Investments and Financial Market Quality
    • 1. Effects of IMFs and ETFs on Financial and Product Markets
    • 2. ETFs and Extreme Market Situations
  • VI. Passive Investments and Corporate Governance
  • VII. Regulation and Systemic Risks
    • 1. Regulation of ETFs
    • 2. Systemic Risk
  • VIII. Summary and Conclusions
*
*)
Dr. rer.pol., Professor of Finance and Banking, Justus-Liebig University Giessen and Research Fellow Center for Financial Studies, Frankfurt/M.
**
**)
Dr. rer.oec., Senior Advisor, Lovell Minnick Partners LLC, Radnor, P.A., USA, and Center for Finance and Banking, Justus-Liebig University Giessen

Der Inhalt dieses Beitrags ist nicht frei verfügbar.

Für Abonnenten ist der Zugang zu Aufsätzen und Rechtsprechung frei.


Sollten Sie über kein Abonnement verfügen, können Sie den gewünschten Beitrag trotzdem kostenpflichtig erwerben:

Erwerben Sie den gewünschten Beitrag kostenpflichtig per Rechnung.


PayPal Logo

Erwerben Sie den gewünschten Beitrag kostenpflichtig mit PayPal.

Verlagsadresse

RWS Verlag Kommunikationsforum GmbH & Co. KG

Aachener Straße 222

50931 Köln

Postanschrift

RWS Verlag Kommunikationsforum GmbH & Co. KG

Postfach 27 01 25

50508 Köln

Kontakt

T (0221) 400 88-99

F (0221) 400 88-77

info@rws-verlag.de

© 2019 RWS Verlag Kommunikationsforum GmbH & Co. KG

Erweiterte Suche

Seminare

Rubriken

Veranstaltungsarten

Zeitraum

Bücher

Rechtsgebiete

Reihen



Zeitschriften

Aktuell