Why low cost funds are nothing new

Earlier this year, a number of fund management groups announced the launch of certain new open-ended funds. The funds were semi-actively managed, with low fees and no commission payable to advisers. They were publicised as being ‘low-risk’ options for investors who chose funds more on the basis of cost than whether they are actively managed. This was in advance of what the managers saw as a change in investor demand after 2012. Commentary in relation to these funds seemed to implicitly recognise the fund management industry had acknowledged that the excessive fees for sub-par performa...