Page 25 - ARUBA TODAY

BUSINESS Wednesday 18 september 2019
A25

Once ridiculed, index funds now hold the reins in US stocks

NEW YORK (AP) — They're that invest in a mix of large
simple, cheap and now the U.S. stocks beat their aver-
most popular way for many age index-fund rival.
people to invest in the U.S. Index funds have a head
stock market: index funds. start in the race for returns
Last month, for the first because of their lower ex-
time, the number of dol- penses. Higher fees mean
lars invested in funds track- actively managed funds
ing the S&P 500 and other have to perform that
U.S. stock indexes eclipsed much better just to match
those in funds run by man- the performance of index
agers trying to beat those funds. The average ex-
indexes, according to pre- pense ratio for stock index
liminary data from Morn- funds was 0.08% last year,
ingstar. With $4.27 trillion which means they held
in assets at the end of Au- onto $8 of every $10,000
gust, U.S. stock index funds invested, according to the
edged past the $4.25 trillion Investment Company Insti-
in funds run by stock-pick- tute. The average expense
ing managers. ratio for actively managed
The figures don't yet in- stock funds, meanwhile,
clude data from several was nearly 10 times that
dozen funds, so they could at 0.76%. Of course, the
change as more funds re- Trader Gregory Rowe monitors stock prices at the New York Stock Exchange, Monday, Sept. 16, rush to index investing has
port. But even if the pre- 2019. raised concerns of its own.
cise moment didn't occur Associated Press If index funds get control
last month, industry watch- of too much of the stock
ers say it's likely inevitable and shoving them into in- four decades ago, when prefer the potential of bet- market, they could distort
that index funds will usurp dex funds for more than a the first index mutual fund ter? prices because money will
actively managed funds' decade. for individual investors hit Turns out that average is flow into stocks based on
top billing. That's because "This milestone has been a the market to ridicule. Why pretty good when most how big a proportion they
investors have been con- long time coming," Morn- would anyone be satis- funds fall short of it. Over are of indexes, rather than
sistently pulling dollars out ingstar said in a report. fied with average returns? the last 10 years, only 8% how valuable investors see
of actively managed funds It's a far cry from roughly Wouldn't investors always of actively managed funds them as a company. q

World's top brewer revives listing plans, halves IPO size

Associated Press for between 27 and 30 years.
HONG KONG (AP) — AB Hong Kong dollars each "You can say the conditions
InBev, the world's larg- ($3.45-$3.83), raising up to are more challenging but
est brewer that produces $4.8 billion. This was lower when we listen to potential
Budweiser and Corona, on than the 40-47 Hong Kong investors, we believe there
Tuesday revived plans to list dollar price range it pro- is solid excitement about
its Asian business in Hong posed earlier. this business and this IPO...
Kong but halved the size of It said the revised offering there is very strong inves-
its initial public offering to includes an "upsize" option tor interest to make this
$4.8 billion. that will allow the compa- transaction happen," he
The move comes two ny to sell up to 38 percent added.q
months after it temporarily more shares if demand is
shelved plans to raise $9.8 strong. That could take the From left, Frank Wang, Executive Director, Jan Craps, Executive
billion in what would have total sale up to $6.6 billion. Director and CEO and Guilherme Castellan, Chief Financial Of-
ficer of Budweiser Brewing Company APAC Limited pose with
been the world's biggest The company said Singa- products in Hong Kong Tuesday, Sept. 17, 2019.
IPO this year, citing mar- pore's sovereign wealth Associated Press
ket conditions due to pro- fund GIC Private Limited
longed, sometimes violent will be its cornerstone inves- the unrest and that the re- The unrest has hit Hong
protests for democratic re- tor, taking up $1 billion or vised valuations will make Kong's economy, which is
forms in Hong Kong. 22 percent of the IPO. The the IPO more attractive. facing its first recession in
It still will be the biggest IPO listing, planned for Sept.
in the semi-autonomous 30, follows the company's
Chinese territory and will recent sale of its Australian
provide a shot-in-the-arm business to Japanese rival
for the government as it Asahi Group for ($11.3 bil-
seeks to assuage inter- lion) to pay down debts.
national jitters over the "We believe now is the right
months-long unrest that moment to do this IPO. We
showed no signs of ending. see keen interest in the mar-
The company's Asia-Pacific ket," said Budweiser APAC's
subsidiary, Budweiser Brew- Chief Executive Jan Craps.
ing Company APAC Lim- He said the company views
ited, said it will offer nearly Hong Kong as the best
1.3 million shares for sale, place for the listing despite