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I wonder if there's an opportunity for someone to come along and undercut the passively managed ETFs and index funds? 0.10% is still a lot of money when you're
by elihu 11y ago
I wonder if there's an opportunity for someone to come along and undercut the passively managed ETFs and index funds? 0.10% is still a lot of money when you're managing billions or trillions; is there any reason someone couldn't come along and provide the same service for a 0.01% or 0.001% fee?
- stouset 11y agoThis seems implausible. A 0.01% fee on a $1bn fund equates to $100,000. This isn't enough to pay a single full-time employee, not to mention to actually conduct trades, perform accounting, and deal with legal/tax considerations.
- d4rkph1b3r 11y agoYou don't really need to make any more then that if you're front running your own trades!
- kasey_junk 11y agoDescribe precisely how that works please.
- klipt 11y agoVanguard is the "credit union" of index funds - it's owned by the funds themselves rather than making a profit for some third party. Vanguard has lowered their fees on several occasions as their funds got bigger, and they manage a ridiculous amount of money, so I imagine they'd be very hard to undercut.