1) Brokerage Charles Schwab Closing Singapore Office Two Years after Launch Reuters | 9/4/2019
Because… Schwab is not only closing the Singapore office two years after its launch, but also bailing out of Australia for the second time. In addition, the firm is planning to cut 600 jobs, which will affect “all staffing grades, as well as organizations and locations across the company.” The closure of overseas offices and job eliminations are signs of increasing pressure from its stakeholders. Schwab is one of the largest providers of index mutual funds and ETFs in the U.S. retail market. In particular, it was the third best-selling ETF sponsor for both the year-to-date and one-year periods. The low costs of passively managed products may not contribute to the firm’s profit maximization. As a publicly-traded company, its stock ended at $42.76 as of September 11, 2019, down from its 52-week high of $52.70.
2) Welcome to Empower Field at Mile High Empower | 9/4/2019
Because… With the start of the football season bringing fans back to stadiums, the 21-year naming rights deal will surely catch the attention of a lot of people. Financial companies have been increasingly resorting to sports sponsorship as a major marketing strategy because they can raise their profile and maximize brand visibility through media coverage and public events. For a potential sponsor, it is important to select a sport, player, or team with clearly defined brand values, which can help convey its value proposition. A sponsoring firm should also gain a deep understanding of the demographics of the sport and choose one with a fan base that corresponds to the firm’s target market in order to form a long-lasting bond with fans and ultimately turn fans into its advocates.
3) End of Era: Passive Equity Funds Surpass Active in Epic Shift Bloomberg | 9/11/2019
Because… The news that “assets in U.S. index-based equity mutual funds and ETFs topped those in active stock funds” is not a surprise. However, when we broke down assets by Morningstar category, we found the trend is only evident in Blend categories, not in Growth and Value categories. As of June 2019, index funds (including mutual funds and ETFs) held more assets than their active counterparts in Large Blend ($1.8 trillion), Mid-Cap Blend ($247.8 billion), and Small Blend ($92.8 billion). On the other hand, active Large Growth, Mid-Cap Growth, and Small Growth funds managed $1.1 trillion, $260.1 billion, and $156.3 billion, respectively, more than their index siblings. Similarly, assets in Large Value, Mid-Cap Value, and Small Value active funds surpassed those in index funds in corresponding categories.