To Those Entering College the Detachable Mouse Is Almost Extinct

A lot can change in just 18 years, but these same 18 years also make up the mindset—or “event horizon”—of today’s entering college students, Beloit College notes.

For those entering college this year, human beings have always been living—not just traveling—in space. The United States has always had troops in Afghanistan. Same-sex marriage has always been legal somewhere, and the once revolutionary “You’ve got mail” announcement from AOL is almost forgotten, according to the 21st Annual Mindset List from Beloit College.

For more stories like this, sign up for the PLANSPONSOR NEWSDash daily newsletter.

A lot can change in just 18 years, but these same 18 years also make up the mindset—or “event horizon”—of today’s entering college students, Beloit College notes. Born in 2000, the first year of the new millennium, these students are members of the college class of 2022. Their new designation—iGen, GenZ, etc. — has not yet been agreed upon by them.

“Students come to college with particular assumptions based on the horizons of their lived experience,” notes Tom McBride, author and Beloit emeritus professor of English. “All teachers need to monitor their references, while students need to appreciate that without a sound education they will never get beyond the cave of their own limited personal experiences.”

Among their classmates could be Madonna’s son Rocco, Will Smith’s daughter Willow, or David Bowie and Iman’s daughter Alexandria. 

Other notable points on the list include:

  • They have always been able to refer to Wikipedia.
  • They have grown up afraid that a shooting could happen at their school, too.
  • People loudly conversing with themselves in public are no longer thought to be talking to imaginary friends.
  • Investigative specials examining the O.J. Simpson case have been on TV annually since their birth.
  • When filling out forms, they are not surprised to find more than two gender categories to choose from.
  • Presidents winning the popular vote and then losing the election are not unusual.
  • Someone has always skied non-stop down Mount Everest.
  • They’ve grown up with stories about where their grandparents were on 11/22/63 and where their parents were on 9/11.
  • The words veritas and horizon have always been joined together to form Verizon.
  • They will never fly TWA, Swissair, or Sabena airlines.
  • The Tower of Pisa has always had a prop to keep it leaning.
  • There has never been an Enron.
  • The Prius has always been on the road in the U.S.
  • They never used a spit bowl in a dentist’s office.
  • There has always been a Survivor.
  • Mifepristone or RU-486, commonly called the “abortion pill,” has always been available in the U.S. 
  • A visit to a bank has been a rare event.
  • “Bipartisan” is soooo last century.
  • Robert Downey Jr. has always been the sober Iron Man.
  • Exotic animals have always been providing emotional support to passengers on planes.
  • Lightbulbs have always been shatterproof.
  • Xlerators have always been drying hands in 15 seconds with a roar.
  • I Love You has always been a computer virus.
  • Thumbprints have always provided log in security—and are harder to lose—than a password.
  • Robots have always been able to walk on two legs and climb stairs.
  • There have always been space tourists willing to pay the price.
  • Mass market books have always been available exclusively as Ebooks.
  • Oprah has always been a magazine.
  • The folks may have used a Zipcar to get them to the delivery room on time.
  • Google Doodles have never recognized major religious holidays.
  • Chernobyl has never produced any power in their lifetimes.
  • Donny and Marie who?
  • They never tasted Pepsi Twist in the U.S.
  • Films have always been distributed on the Internet.
  • Environmental disasters such as the BP Deepwater Horizon, and the coal sludge spill in Martin City, Ky., have always exceeded the Exxon Valdez oil spill.
  • The detachable computer mouse is almost extinct.
The Mindset List’s creator Ron Nief, Public affairs director emeritus at Beloit College, says this will be the last year that the Mindset List will be associated with Beloit College, but it will continue in the future at themindsetlist.com or at a new institutional home.

Institutional Investors Need to View ETFs Differently

Investors and broker-dealers should start treating ETFs as an asset class all their own, Kevin McPartland, with Greenwich Associates suggests.

“ETFs [exchange-traded funds] were initially designed to provide retail investors with easier and cheaper access to mutual funds. Over the years, their utility has been shown to be so much more than that. ETFs help institutions to hedge risk, manage their cash flow needs, gain quick exposures to illiquid market segments, and more. But in order for institutional use of ETFs to grow and mature, long-held structures for managing clients and trading products need to change,” concludes a report written by Greenwich Associates Managing Director Kevin McPartland, who is head of research for the firm’s Market Structure and Technology practice.

Investors and broker/dealers should start treating ETFs as an asset class all their own, the report suggests.  Doing so would help improve execution quality and ramp up client commissions and overall profitability.

Never miss a story — sign up for PLANSPONSOR newsletters to keep up on the latest retirement plan benefits news.

Trading practices on both the sell side and buy side are leading to suboptimal executions, limiting ETF growth. For example, according to Greenwich Associates, many equity broker/dealers and market makers treat ETFs as equities, given they trade on equity exchanges. Many investors take the same approach, trading ETFs with algorithms and using transaction cost analysis (TCA) systems designed for single stocks, rather than ETFs. Further, while fixed-income ETFs trade on equity exchanges, they move like the bond market, putting equity traders far out of their comfort zone. 

According to the report, market leaders are starting to break away from these long-held beliefs.  For clients that need credit market exposure, traders and portfolio managers must explore all of the products at their disposal, and not just those with which they are most comfortable. Similarly, broker/dealer sales teams should be willing and able to offer clients access to the right instrument, and not just those that they cover or the one the client requested.

Equities are for growth, fixed income is for capital preservation, other asset classes are used for liquidity or to hedge risk—what should ETFs, as a separate asset class be used for? “For the most part ETFs are indexes, and so need to be treated as such. You can’t trade an index the same as a single stock or a single bond. It is important to understand the dynamics of the index constituents, and take those market dynamics into account when trading the ETF. For instance, does the ETF share price reflect the NAV [net asset value] of the portfolio?” McPartland tells PLANSPONSOR.

“Fixed income ETFs should be traded by fixed income traders,” he adds. “Commodity ETFs by the commodity desk. Over time, investors should care about getting the needed exposure at the best price, regardless of the instrument used to get there. The sell side should service them the same way, not keeping instruments siloed based on where or how they trade.”

According to McPartland’s report, there’s a negative stigma regarding ETFs among many institutional investors. “For instance, when a major sovereign wealth fund allocates $1 billion to an asset manager to achieve defined investment objectives, they are doing so with the belief that the asset manager can obtain the expected return at the right price and level of risk. If that asset manager then turns around and puts some of that $1 billion into ETFs—even if those ETFs provide the lowest cost exposure—some believe the manager is thereby skirting its duties and outsourcing the work to the ETF provider.”

The report notes that index futures have been used to gain exposure and hedge portfolios for decades. Beyond the technical differences between the product constructs, index-tracking ETFs can provide the same service.

According to the Greenwich Associates 2018 North American Fixed-Income Investors Study, only 12% of U.S. investment-grade credit investors are using ETFs. According to Greenwich Associates 2017 North American Fixed-Income Investors Study, the purposes for which the few investment-grade investors are using ETFs are:

  • Hedge undesired portfolio risk – 53%;
  • Maintain exposure to a liquid investment – 41%;
  • Park cash positions in ETF to minimize cash drag – 35%;
  • Meet potential cash flow needs – 29%; and
  • Gain exposure to a sector or region/country – 24%.

A change in mindset is clearly needed to increase ETF use among institutional investors, according to the report.

Information about how to obtain a copy of the report, “Letting ETFs Stand on Their Own,” is here.

«