4 ms·

This guy is awesome. We should have more that kind of funds. 0.75% yearly expense ratio: http://www.etf.com/HACK http://www.etf.com/HACK The whole finance coul

This guy is awesome. We should have more that kind of funds. 0.75% yearly expense ratio: http://www.etf.com/HACK http://www.etf.com/HACK The whole finance could be disrupted if funds will charge less and less for commission. I believe anything over 1%/year is ridiculous high. Fundamentally there is little reason why we couldn't have active funds for the price of ETFs. Self index ETF seems to me like low cost active funds with open-source public investment thesis.

joosters 11y ago
0.75% TER is still far too high (like, charging at least three or four times too much) for something that is a passive index. Many indexes are 0.15% and under.
- chkuendig 11y ago
  Is it a passive index though? Seems like ISE specifically maintain the index for this fund and fees of the fund also go to the guys in charge of the index (ISE).
- kspaans 11y ago
  Not to mention that ETF is more expensive _and_ less diversified than broader market index funds. And the index it follows isn't even doing anything fancy like Dimensional Fund Advisors (they don't use a market-cap weighted index, they have their own formulas to calculate weights).
- PhantomGremlin 11y ago
  Yes, too expensive. This article was posted a few hours earlier, and I pointed out that ETFs like SPY and VOO are much cheaper, 0.09% and 0.05% respectively. https://news.ycombinator.com/item?id=10123060 https://news.ycombinator.com/item?id=10123060
  - cowsandmilk 11y ago
    Buying HACK is to invest in a particular industry. SPY and VOO don't track an industry, they track large us companies.
usertaken 11y ago
An active fund at 1% or less per year doesn't make sense. Most mutual funds essentially act like ETFs as a lot of them are focused on relative performance and not absolute performance. You should read the beginning chapters of Margin of Safety (if you can find the book) as it really helps to explain the mindset of a MF. To reduce expenses for active funds further will only exacerbate this. If you want to outperform the market, however, you need to find a GREAT hedge fund that charges 1% management fee (at most) and an incentive fee...otherwise it doesn't make sense to pay a flat fee to a MF and get just average performance. (There are exceptions as some MFs do consistently outperform the market but these are few and FAR between).
- nickles 11y ago
  > If you want to outperform the market, however, you need to find a GREAT hedge fund that charges 1% management fee (at most) and an incentive fee...otherwise it doesn't make sense to pay a flat fee to a MF and get just average performance. (There are exceptions as some MFs do consistently outperform the market but these are few and FAR between). You'll have difficulty finding even a good hedge fund at 1% management fee. Most charge what's known as Two and Twenty -- 2% of assets under management and 20% of profits. Point72 charges as high as 3% and 50%.
  - usertaken 11y ago
    I work in the industry. You are right on a general basis but there are plenty of funds that don't get a lot of press and kill it year in and year out AND charge less than 2 and 20. Most hedge funds are, at best, average because they don't know what they're doing. Don't blindly give 2 and 20 to an avg. hedge fund. Do the math and giving even 2 and 20 to a superstar will allow you to compound at a much faster rate than the S&P500.

joosters 11y ago

0.75% TER is still far too high (like, charging at least three or four times too much) for something that is a passive index. Many indexes are 0.15% and under.

chkuendig 11y ago
Is it a passive index though? Seems like ISE specifically maintain the index for this fund and fees of the fund also go to the guys in charge of the index (ISE).
kspaans 11y ago
Not to mention that ETF is more expensive _and_ less diversified than broader market index funds. And the index it follows isn't even doing anything fancy like Dimensional Fund Advisors (they don't use a market-cap weighted index, they have their own formulas to calculate weights).
PhantomGremlin 11y ago
Yes, too expensive. This article was posted a few hours earlier, and I pointed out that ETFs like SPY and VOO are much cheaper, 0.09% and 0.05% respectively. https://news.ycombinator.com/item?id=10123060 https://news.ycombinator.com/item?id=10123060
- cowsandmilk 11y ago
  Buying HACK is to invest in a particular industry. SPY and VOO don't track an industry, they track large us companies.

usertaken 11y ago

An active fund at 1% or less per year doesn't make sense. Most mutual funds essentially act like ETFs as a lot of them are focused on relative performance and not absolute performance. You should read the beginning chapters of Margin of Safety (if you can find the book) as it really helps to explain the mindset of a MF. To reduce expenses for active funds further will only exacerbate this. If you want to outperform the market, however, you need to find a GREAT hedge fund that charges 1% management fee (at most) and an incentive fee...otherwise it doesn't make sense to pay a flat fee to a MF and get just average performance. (There are exceptions as some MFs do consistently outperform the market but these are few and FAR between).

nickles 11y ago
> If you want to outperform the market, however, you need to find a GREAT hedge fund that charges 1% management fee (at most) and an incentive fee...otherwise it doesn't make sense to pay a flat fee to a MF and get just average performance. (There are exceptions as some MFs do consistently outperform the market but these are few and FAR between). You'll have difficulty finding even a good hedge fund at 1% management fee. Most charge what's known as Two and Twenty -- 2% of assets under management and 20% of profits. Point72 charges as high as 3% and 50%.
- usertaken 11y ago
  I work in the industry. You are right on a general basis but there are plenty of funds that don't get a lot of press and kill it year in and year out AND charge less than 2 and 20. Most hedge funds are, at best, average because they don't know what they're doing. Don't blindly give 2 and 20 to an avg. hedge fund. Do the math and giving even 2 and 20 to a superstar will allow you to compound at a much faster rate than the S&P500.