Baillie Gifford: ETFs are for Suckers

Monks trust manager Charles Plowden says passive funds are “non-thinking money” and investors “have forgotten their role in the economic chain”

Holly Black 23 October, 2017 | 7:30AM

Investors using exchange traded funds and index trackers are “the next bunch of suckers”, says one fund manager. Charles Plowden, manager of the £1.6 billion Monks Investment Trust (MNKS) has likened the rise of passive investments to the opaque mortgage products which contributed to the financial crisis.

The veteran manager, who has worked at Baillie Gifford since 1983, says passives are “non-thinking money” and investors “have forgotten their role in the economic chain”.

“The move to passive investments is not investing, it is blindly following statistical constructs. Traders aren’t creating, building or nurturing anything and that is what is investing is,” says Plowden.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Alibaba Group Holding Ltd ADR191.27 USD1.42
Amazon.com Inc1,963.95 USD3.36
Monks Ord785.55 GBX2.02
Royal Caribbean Cruises Ltd29.77 USD-13.71

About Author

Holly Black  is Senior Editor, Morningstar.co.uk

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