Friday, 5 May 2017
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ASX Education: Active v Passive

Much has been written recently about the relative merits of taking an active approach or just letting your funds track an index.

The growth of passive funds has been extraordinary. The head of Vanguard in Australia was in the news last week as the FUM have grown to $5.4 trillion. $2.9 trillion is tracking indices around the world.

Vanguard has 20m investors around the world, with management fees on average 12bps.

You can see how attractive these ETFs have become. Platinum Asset Management dropped its fees this week to 1.35%, still far higher. Transaction costs are key to keeping the costs down for ETF fund managers. Last year the team at Vanguard

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