Zero-Fee ETFs?

The management fees on most mutual funds and ETFs have fallen significantly due to competition in the space. With some as low as .03%, can it go any lower? The answer is yes, as some are predicting a fee of 0% (or even a negative fee, with investors being paid to use certain products). How is this possible? With more assets, economies of scale allow for a lower fee. Further, asset managers can generate revenue on the underlying securities, primarily through lending to short sellers. So, who will win the "race to zero?" See article here, WSJ.

Long-Short (Equity-Bond) Investment

Given the historically low interest rate, some investors with long time horizons (philanthropies as an example) are issuing long-dated bonds (i.e., going short) and using the funds to invest (i.e., going long) in the equity markets. As long as equity markets outperform bonds over the time period, the trade creates a positive return. See article here, WSJ.