We kindly invite you to the BICEPS/SSE Riga research seminar! It will take place on Thursday, February 14 at 17.00 in room 611 with the presentation:
“Exchange traded funds: A free lunch for active fund managers?” by Tālis Putniņš (SSE Riga).
The rapid growth of exchange traded funds (ETFs) to over $5 trillion in global assets is part of a broader shift away from active mutual funds to passive and index-based investing. Because passive investing has little regard for relative valuations, it could result in pervasive mispricing of stocks and a “free lunch” for (surviving) active fund managers. I argue that this view, which has been put forward by prominent market observers, is not necessarily true because there are several mechanisms through which ETFs could have the opposite effect and make prices more efficient. The evidence to date points away from the notion of a free lunch and supports the improved efficiency view.
No prior registration for the seminar is necessary. For any questions about the seminar, or if you have a colleague that would like to be added to the distribution list, please write to Nicolas Gavoille.