Is the brand-new US Sovereign Fund a competitor to large hedge funds?


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It is no secret that once-forefront firms like Vanguard have fallen behind the latest fintech developments. For example, Vanguard still offers several CRSP-indexed index funds such as the Vanguard Value Index Fund, the Vanguard Total Stock Market Index Fund, and the Vanguard Mega Cap Index Fund. These funds are reallocated only once per year, missing out on many trends. The funds also invest into micro-cap stocks, sometimes buying 50\% of all the shares \textit{outstanding} in the markets. The latter necessitates participation of specialized market-makers like Citadel to assemble enough shares for Vanguard's ill-considered appetite. Citadel charges a pretty penny for its services, for which Vanguard's investors (usually moms and pops invested in pension funds) are unknowingly paying. In other words, Citadel wins and moms and pops lose.

On the other hand, Norway's Sovereign Wealth Fund has been incredibly successful, growing the country's social security system and more. Can Trump's sovereign fund match their success? Waiting on the edge of my seat to see what happens next!


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