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Active and passive are just marketing labels. The frequency of trades should be correlated with the expense ratio. If you do more trades, you better be hiring m
by jackcosgrove 10y ago
Active and passive are just marketing labels. The frequency of trades should be correlated with the expense ratio. If you do more trades, you better be hiring more analysts to figure out those trades.
Vanguard has lower costs because it employs fewer people to execute fewer trades. That's all I really care about.
- jessriedel 10y agoExpense ratios for actively managed funds aren't that tied to trading frequency, I don't think. Most of the cost goes to paying for research, and that can be for positions held on all time scales. Someone picking a handful of blue chip stocks based on fundamentals is still definitely "active investing" even if they buy and hold for a long time.