Gamco Investors, Inc.NYSE
GAMCO Investors' Upcoming Spin-Off To Unlock Significant Value
Alpha Gen Capital
Alpha Gen Capital
How GAMCO Investors Excited Me, For A Minute
Mon, Oct. 17, 2:00 PM
- It's the kind of headline that makes one wonder if the bottom might already be in for traditional asset managers.
- The numbers won't surprise anyone who's been following along for any length of time: Over the three years ended Aug. 31, investors added nearly $1.3T to passive mutual funds and ETFs, while pulling more than $250M from active mutual funds.
- "Stock pickers, archetypes of 20th century Wall Street, are being pushed to the margins," write Anne Tergesen and Jason Zweig. "The pressure has gotten so great that passive has become the default,” says former Fidelity CIO Philip Bullen.
- And by the way, there's still plenty of room for the trend to continue - 66% of mutual and exchange-traded fund assets are still actively invested (down from 84% ten years ago).
- Active fund firms that don't “position themselves for the sea change” will be “relegated to the dustbin of history," said Cohen & Steers (NYSE:CNS) in shareholder letter earlier this year.
- Notable industry names: BLK, OZM, BEN, LM, GBL, CLMS, JNS, IVZ, TROW, AB, AMG, FII, WDR, APAM, MN, EV, AMP
Thu, Oct. 6, 8:51 AM
- In one of the highest quarterly amounts ever, investors moved $92B into ETFs in Q3, according to UBS, bringing AUM for U.S.-listed ETFs to about $2.4T.
- For the year, $150B has flowed into ETFs, putting the vehicles on track for their third straight year of inflows north of $200B. The inflows stand in major contrast to either outright net exits or minimal inflows for mutual funds.
- Still, even after doubling AUM since 2011, ETFs account for just 17% of mutual fund assets.
- Interested parties: BLK, WETF, BEN, LM, GBL, CLMS, JNS, IVZ, TROW, AB, AMG, FII, WDR, APAM, EV
Fri, Sep. 16, 8:31 AM
- Just 9.5% of actively-managed large-cap domestic equity funds beat the S&P 500 in the five year ended August 31 - the worst 5-year record since 1999, according to Morningstar. By comparison, in the five years ended 2010, nearly 50% topped the S&P.
- The lame results haven't gone unnoticed, with investors yanking $422B from roughly 3K mutual funds in the past five years, and putting that money and more into passive vehicles (ETFs).
- In the year ended June 30, 85% of large-cap stock funds, 88% of mid-cap funds, and 89% of small-cap funds failed to match their bogeys. "Pretty appalling," says S&P's Aye Soe. "Given the choppiness in the markets we would have expected the active managers to come out looking better.”
- Interested parties include BlackRock (NYSE:BLK), WisdomTree (NASDAQ:WETF), Franklin Resources (NYSE:BEN), Legg Mason (NYSE:LM), Gamco (NYSE:GBL), Janus (NYSE:JNS), Calamos (NASDAQ:CLMS), Invesco (NYSE:IVZ), T. Rowe Price (NASDAQ:TROW), AllianceBernstein (NYSE:AB), Affiliated Managers (NYSE:AMG), Federated Investors (NYSE:FII), Waddell & Reed (NYSE:WDR), Artisan Partners (NYSE:APAM)
Fri, Sep. 9, 7:33 AM
Tue, Aug. 2, 5:33 PM
Thu, Jul. 7, 1:35 PM
- Continuing to benefit from the trend toward low-cost, index-tracking funds, Vanguard Group pulled in $148B in the first half of the year, topping last year's record H1 haul of $140B.
- The fund giant sports four of the top 10 ETF inflow recipients so far this year, the S&P 500 Index Fund (NYSEARCA:VOO), the FTSE Developed Markets ETF (NYSEARCA:VEA), the REIT Index Fund (NYSEARCA:VNQ), and the Total Bond Market Index Fund (NYSEARCA:BND).
- Eyeing with envy: BEN, LM, GBL, CLMS, JNS, IVZ, TROW, AB, AMG, FII, WDR, APAM
Thu, May 5, 10:24 AM
Mon, Apr. 4, 3:24 PM
- Just 19% of large-cap U.S. stock funds topped the S&P 500 in Q1, according to BAML's Savita Subramanian. It's the worst performance on that metric since the data started being tracked in 1998.
- The average large-cap fund trailed the S&P by 190 basis points, "a record spread of underperformance."
- It was the March rally that helped do managers in, says Subramanian, noting one-third of them beat the market in January, and 27% in February.
- "The lit match taken to active returns last quarter was likely the massive reversal – by the market, by sectors, by styles and by stocks – occurring within the quarter ... Crowded positions proved particularly damning in the Q1, with the 10 most crowded stocks underperforming the 10 most neglected stocks by almost 7 percentage points, an atypically high spread.”
- It's another rough session for traditional asset managers today: Franklin Resources (BEN -1.8%), Legg Mason (LM -4.1%), Gamco (GBL -1.3%), Janus (JNS -1.6%), Invesco (IVZ -1.1%), Affiliated Managers (AMG -2.2%), Waddell & Reed (WDR -3.3%)
- Now read: It's Official: The Good Times Are Over (April 4)
Wed, Mar. 2, 10:38 AM
- According to Thompson Reuters, investors yanked more than $60B from mutual funds globally during January, the worst month outflows since September 2008. European funds fared the worst, with $47B of net outflows.
- The exits came, of course, as stock markets suffered their worst January in at least 20 years.
- Source: FT
- It's more bad news for asset managers like - Franklin Resources (NYSE:BEN), Legg Mason (NYSE:LM), Gamco (NYSE:GBL), Janus (NYSE:JNS), Invesco (NYSE:IVZ), T. Rowe Price (NASDAQ:TROW), AllianceBernstein (NYSE:AB), Affiliated Managers (NYSE:AMG) and Federated Investors (NYSE:FII) - but on the good side, the redemptions were met without any notable issues.
- “Fundamentally, the outlook is quite negative for the asset management industry in 2016," says Citi's Haley Tam.
Thu, Feb. 18, 4:49 PM
- Gamco Investors (NYSE:GBL): Q4 EPS of $0.67
- Revenue of $90.32M (-17.7% Y/Y)
Wed, Jan. 27, 9:23 AM
- Executives at Goldman Sachs gasped at a meeting last fall when the bank's asset management unit presented to them a new ETF with annual fees of just 0.09%.
- Story from the WSJ's Jason Zweig and Sarah Krouse
- It's not just the booming ETF industry where price wars abound, but mutual funds are getting less costly as well. The average fund tracked by Morningstar charges 1.07%, down from 1.22% in 2005.
- It's not all bad for mutual fund providers, who say they offer bargain prices on some products as "loss leaders" to get investors in the door where they can then be pitched more expensive funds and strategies. Still fund industry profit margins are slipping - 22% in Q3 from 25% a year earlier, according to DST Kasina.
- Industry comments: "We’re not surprised at all to see passive managers compete on fees because that’s their only differentiator,” says AlianceBernstein's (NYSE:AB) Chris Thompson, whose company has boosted marketing efforts for its actively-managed strategies.
- "We are in the business of increasing earnings,” says BlackRock's (NYSE:BLK) Mark Wiedman, whose firm's total stock market ETF now charges a barely-visible 0.03%. “Over time, the revenue growth from volume will outstrip the price cuts in these products.”
- Other interested parties: BEN, LM, GBL, JNS, IVZ, TROW, AMG, FII
Wed, Jan. 6, 11:58 AM
- in the latest sign of the move out of active investing, a record $236B poured into indexing-pioneer Vanguard last year, exceeding the $215.5B of inflows in 2014.
- AUM at Vanguard rose to more than $3.1T. Investors pay under $0.18 per $100 invested in Vanguard products versus $1.23 for the average actively managed one (and $0.89 for average passive fund).
- In the first 11 months of 2015 according to Morningstar, passively managed stock and bond funds saw $361.8B of inflows, and actively managed ones $139.5B of outflows.
- Interested parties: BLK, WETF, BEN, LM, GBL, CLMS, JNS, IVZ, TROW, AB, AMG, FII, WDR, APAM.
Dec. 28, 2015, 6:06 PM
- Holders of GAMCO Investors (NYSE:GBL) 5.875% Senior Notes due June 1, 2021 tendered $75,775,000 of the $100M aggregate principal amount outstanding in response to the company's cash offer, which expired today.
Dec. 8, 2015, 1:51 PM
- "ETFs are just a better mousetrap than a mutual fund," says BlackRock (BLK -1.6%) President Robert Kapito, speaking at an investment conference. "Every day, people are coming up with new uses for them."
- Among those new uses are ETFs as hedging tools and as alternatives to derivatives. "We're just in the early stages of where this is headed."
- ETFs had $3T in assets as of Oct. 31, according to BlackRock (whose iShares has about one-third of that amount), and Kapito thinks this could double in the next three to four years. At risk: Mutual funds and their nearly $16T in assets.
- Reporting from the Global Indexing and ETFs Conference, Josh Brown says clients will never be 100% satisfied with being 100% passive, allowing asset managers the opportunity to figure out another way to deliver benefits. He notes benchmarks themselves "are human constructs - not stone tablets." The next hot thing are ETMFs, which allow mutual fund-like hiding of positions inside an ETF construct. Eaton Vance (NYSE:EV) will be first to market.
- Interested parties include pure-play ETF manager WisdomTree (NASDAQ:WETF), as well as mutual fund providers like Franklin Resources (NYSE:BEN), Legg Mason (NYSE:LM), Gamco (NYSE:GBL), Janus (NYSE:JNS), T. Rowe Price (NASDAQ:TROW), AllianceBernstein (NYSE:AB), Affiliated Managers (NYSE:AMG).
Dec. 2, 2015, 12:05 PM
- So far this year, Vanguard is leading the way as a record $365B flows into low-cost, passively-managed index funds and ETFs, while actively-managed mutual funds have lost $147B, reports Bloomberg. That roughly $500B swing at roughly 50 basis points (the difference between active and passive fees) means $25B less going to the financial services industry.
- That $25B compares to about $200B per year globally in trading and asset management revenue, but there's also the "hidden fees" active managers rack up from continuously buying and selling - on average active mutual fund managers turn over portfolios at 10x the pace of a Vanguard index fund.
- But that's not all ... It took Vanguard 32 years to reach $1T in assets, eight to get to $2T, and just three to get to $3T. Vanguard alone could be removing $40B in revenue from the financial industry by 2020. There's also the "Vanguard Effect" in which other funds lower fees to try and compete with the giant's Wal-Mart-like "everyday low prices."
- The good news for active managers: As ETFs (passive-investing) proliferate (they now account for 30% of total assets), it should give sharp managers a little more room to actually create some alpha.
- Interested parties: BlackRock (NYSE:BLK), WisdomTree (NASDAQ:WETF), Franklin Resources (NYSE:BEN), Legg Mason (NYSE:LM), Gamco (NYSE:GBL), Janus (NYSE:JNS), Invesco (NYSE:IVZ), T. Rowe Price (NASDAQ:TROW), AllianceBernstein (NYSE:AB), Affiliated Managers (NYSE:AMG), Federated Investors (NYSE:FII), Waddell & Reed (NYSE:WDR), Artisan Partners (NYSE:APAM), Cohen & Steers (NYSE:CNS), Manning and Napier (NYSE:MN), Virtus Investment (NASDAQ:VRTS), Eaton Vance (NYSE:EV)
Dec. 1, 2015, 1:10 PM