They undercut traditional managers while upselling traditional ETF investors
Here’s what I love about owning an equity fund. Every day thousands of employees wake up early and commute. They bust a gut winning clients, optimising supply chains and coding, all of which generate earnings. These accrue to me — even when catching a wave or a few winks on the sofa afterwards. Shareholders receive a slice of the spoils and not a Zoom call must we endure. So a big thanks to all those readers who work for one of the 1,245 holdings in my funds.
2 per cent annually and the whizz-bang one 0.3 per cent. At first glance, many readers would consider the latter a bargain. Active management and superior returns for only 10 more basis points? It seems madness to refuse when put like that. Plus you can trade in and out of active ETFs whenever you want. Trouble is, active ETFs won’t make you any more money, on average. What they will do is hasten the demise of old-school active funds — the sort I used to run charging 50 to 100 basis points.
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