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ETFs Aren’t About to Destroy the World – Bloomberg

May 02
14:14 2017

A Bloomberg News article caught my attention last week. It cited the managers of FPA Capital Fund Inc., an actively managed equity fund, making the following assertion in their quarterly letter to investors: “Exchange-traded funds are ‘weapons of mass destruction’ that have distorted stock prices and created the potential for a market selloff.”

Although I believe that statement not only is problematic but also wrong, I decided to download and read the complete missive of co-managers Arik Ahitov and Dennis Bryan. They say lots of interesting things, and dissecting what the managers of this $789 million fund wrote is our charge today.

No. 1: Fundamentals no longer matter

Let’s assume the assumption is true; the key question is, “Does it matter?”

Continue Reading At Bloomberg

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