Bloomberg – Quick now, which investment vehicle is growing fastest here in the mid-’00s? a) hedge funds; b) exchange-traded funds; c) mutual funds.
Answer: c) mutual funds, hands down. And no, that’s not a trick question. While hedge funds and ETFs get all the plaudits as hot growth properties, neither is gaining any ground on the much bigger, supposedly mature mutual-fund business. If anything, they are falling farther behind.
Consider that at mid-2005, as the Investment Company Institute trade association recently reported, worldwide assets of mutual funds came to $16.4 trillion, up from $14.5 trillion at the end of the second quarter a year earlier.
That $1.9 trillion increase is more than the total assets of hedge funds ($1.1 trillion, according to Hedge Fund Research Inc.) and ETFs ($360 billion, according to Morgan Stanley) combined.
