According to BlackRock’s iShares, the industry is experiencing a “coming of age” moment where management fees are being driven lower by increased competition among providers and growth in fund sizes. In the U.S., for example, BlackRock, Vanguard and Charles Schwab have been among the leading instigators in the ongoing fee war. [ETF Fee War Prompts Investors To Re-Evaluate Holdings]
Bolstering demand for passive ETFs, European pension schemes, with a combined assets of €1.9 trillion, are also planning to double passive fund exposure to 40% of their portfolios by the end of the decade due to “implementation leakage,” or active funds failing to deliver on promised returns, reports Steve Johnson for Financial Times.
“The ex post returns rarely match the ex ante promises,” Amin Rajan, chief executive of Create Research, said in the article.
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Max Chen contributed to this article.