Mark Northway: Has the passives industry become its own worst enemy?

Debate must focus on value not cost

clock • 3 min read

The focus on cost in the passive industry creates damaging misconceptions, writes Mark Northway. Here he explains why price might win the battle, but value will win the war

A battle on fees, a war on price or a campaign against charges - whichever way it is framed, the debate about passive funds and price is often far more superficial than it deserves to be. The age-old debate rages on - active managers claim that stock picking expertise, which they suggest leads to outperformance, warrants higher charges; the passive world says it can deliver commensurate returns at a fraction of the cost.  But the passive industry may have become its own worst enemy in debating price on the investment battlefield, often using price as an overly simplistic differentiato...

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