Spencer Betts has always been an active management guy. He didn’t like benchmark-hugging ETFs because passive products hold the bad companies with the good. If a big player on the S&P 500 were to go south and drag down the index, then the ETF would fall in tandem. Stock picking, he said, made more sense. About two years ago, Betts started hearing about smart beta products — ETFs that implement investment strategies like value, momentum and high yield, and are designed to beat the benchmark.
While Fidelity has been investing in private companies for more than 20 years, it has been buying into more unicorns lately due to the lack of IPOs, says Andrew Boyd, head of global equities capital markets at the Boston-based mutual fund firm. In many cases, these companies could be public and would have been already if this were a decade ago, he says. Executives, though, want to grow the business for longer, away from prying eyes and daily market ups and downs.
One morning last year, at 5 a.m., Patti Barnes woke to a strange rustling noise coming from the main floor of her house. She got out of bed to investigate. Downstairs, she made a startling discovery: Her then five-year-old was sneakily playing Minecraft on the family’s iPad. Barnes couldn’t believe it. “I asked her what she was doing,” says the Vancouver mother of five.