1) Investors Pull Record $53 bln from U.S. Taxable Funds in October - Lipper Reuters | 11/15/2018
Because… The magnitude of investor withdrawals from Taxable Bond mutual funds and ETFs in October is astonishing. According to Morningstar data, the asset class bled a net $26.6 billion, compared with its net intake of $20.7 billion in September and $39.1 billion in October 2017. While it remained the best-selling asset class for the year, its inflows of $164 billion decreased 52% from a year ago when it absorbed $340 billion in the first 10 months. Intermediate-Term Bond, a previous top-selling asset category, became the worst seller in October with net redemptions of $28.5 billion. On the other hand, Ultrashort Bond moved to the top with a net $11.4 billion, indicating that market volatility and uncertainties are forcing investors to seek refuge in short duration strategies.
2) Startup Acorns Is in Talks to Seek Funding at $700 Million Valuation Bloomberg | 11/16/2018
Because…Acorns is already backed by some well-known investors, such as PayPal, BlackRock, Bain Capital, TPG, and Capital Group. While $700 million seems a rich valuation, raising a significant amount of funds for the most popular micro-investing app is not impossible. Since it was founded four years ago, four million users have entrusted the fintech firm with more than $1 billion. Acorns’ model that encourages people to start small, its digital wealth solution that automatically rounds up each purchase and invests the extra change in a risk-based ETF portfolio, and its expanding database that facilitates analyses of small investors’ behaviors and preferences could make Acorns very appealing.
3) Vanguard Shareholders to Save Estimated $80 Million Through Broader Access to Low-Cost Admiral Shares Vanguard | 11/19/2018
Because… When Fidelity sent shock waves through the industry in August with the launch of two zero expense ratio mutual funds and no investment minimum requirement on its retail and advisor mutual funds and 529 plans, many wondered how its rivals would react. Vanguard has just responded with a delivery of a Thanksgiving gift. Instead of cutting fees of Investor Shares, it reduced investment minimum of lower-cost Admiral Shares of 38 index funds from $10,000 to $3,000. The move will not affect investors already holding Admiral Shares, but it will open up new savings opportunities for those with low account balances.