According to the consultancy McKinsey & Company, sleep-deprived brains lose the ability
to make accurate judgments—sometimes leading to consequences in the place.
Executives polled for a McKinsey survey seem to be operating on
relatively little sleep. Four out of ten (43%) said they do not get enough
sleep at least four nights a week; nearly six out of 10 said they do not sleep
enough at least three nights a week. And all those lost hours of sleep are of
little consequence, executives said, with nearly half (46%) stating that lack
of sleep has little impact on leadership performance.
Seven out of 10 business leaders in the survey said sleep
management should be taught in organizations the same way as time management
and communication skills. Programs should be part of a unified learning program
with several components, such as online assessments, in-person workshops, and a
performance-support app offering reminders, short inspirational videos or
animations, additional assessments, and opportunities to connect with online
communities.
Other highlights from the survey of 196 business leaders are:
Two-thirds
say they were generally dissatisfied with how much sleep they get, and 55% were
dissatisfied with the quality of sleep;
Almost
half (47%) feel that their organizations expect them to be “on” too long and
too responsive to emails and phone calls;
Over
a third (36%) say that their organizations do not allow them to make getting
enough sleep a priority; and
More than four out of five (83%) say their
organizations did not spend enough effort educating leaders about the
importance of sleep.
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Expense ratios for equity, hybrid,
and bond mutual funds dropped in 2015 to the lowest level in at least 20
years, while money market fund expense ratios remained at their 2014
low, according to data released by the Investment Company Institute
(ICI).
“Mutual fund expense ratios have been experiencing an
overall decline for many years, driven by increased competition and
growth in the fund industry,” says Sean Collins, ICI’s senior director
of industry and financial analysis. “Expense ratios for both actively
managed and index funds have seen substantial declines.”
A fund’s
expense ratio is the fund’s total annual expenses expressed as a
percentage of its net assets. According to Lipper and ICI data, in 1996,
the average expense ratio for equity mutual funds was 104 basis points
(bps) compared to 68 bps in 2015 (0.68% of assets). For hybrid mutual
funds, expense ratios dropped from 95 bps to 77 bps during the same
period. Bond mutual funds saw expenses decrease from 84 bps in 1996 to
54 bps in 2015. Money market funds also saw a decline from 52 bps to 13
bps.
Actively managed equity funds expense ratios dropped from
108 bps in 1996 to 84 bps in 2015. For actively managed bond mutual
funds the decrease was from 84 bps to 60 bps. In 1996, the average
expense ratio for index equity funds was 27 bps, compared to 11 bps in
2015. For index bond funds, expense ratios fell from 20 bps to 10 bps
during the same period.
NEXT: Reasons for expense ratio declines
ICI says the growing popularity of index funds contributes to the
decline in equity fund expense ratios. Weighted by assets, average
equity fund expense ratios fell 2 bps to 68 bps in 2015. This follows a 4
basis point decline in 2014 and marks the sixth straight year in which
equity fund expense ratios have fallen. An increase in the share of
equity fund assets held in index funds contributed to the decline in
equity fund expense ratios: actively managed equity fund assets fell by
$275 billion in 2015, while index equity fund assets rose by $109
billion.
In 2015, bond fund expense ratios fell 3 bps, in large
measure reflecting a decline in the assets of high-yield bond funds,
which tend to have higher-than-average expense ratios. Performance of
high-yield bonds suffered in 2015, pushing down the value of funds’
holdings and prompting investor redemptions.
The average expense
ratio of hybrid mutual funds, which invest in a mix of equities and
bonds, fell 1 basis point to 77 bps in 2015, a smaller decline than
stock and bond funds experienced. Hybrid fund assets have increased
substantially in recent years, with a portion of that growth occurring
among “alternative strategy” funds, which now account for 8% of the
assets of all hybrid funds. Alternative strategy funds offer fund
investors diversification across a wider range of asset classes and
lower correlation with the equity market, but such strategies can be
more costly to manage. The average expense ratio for other types of
hybrid funds fell 2 bps in 2015.
Money market fund expense ratios
averaged 13 bps in 2015, unchanged from 2014. The current low interest
rate environment has limited the expense ratios of money market funds
over the last few years, as these funds have waived portions of their
fees to prevent their net yields falling below zero. In 2015, 98% of
money market fund share classes waived at least some portion of their
fees. Fund advisers and their distributors pay for these waivers, which
totaled an estimated $5.5 billion in 2015.
The average expense
ratios for actively managed equity and bond funds fell by 2 and 3 bps,
respectively, in 2015, though the expense ratios of index funds have
leveled out in the past two years. The declining cost of actively
managed funds was due in large part to competitive pressures and
investor interest in lower-cost funds.
For both actively managed and index funds, this demand for lower-cost
funds is evidenced by the concentration of assets in the very lowest
cost funds. In 2015, 57% of the assets of actively managed equity funds
were held in the 10% of such funds with the lowest expense ratios. In
2015, 69% of index equity fund assets were held in the 10% of index
equity funds with the lowest expense ratios.