newsheaven

The competition within the realm of passive index funds is fierce. Whereas active managers seek differentiation through their returns, investment strategies, or brand credibility, index fund providers mainly vie for supremacy based on their size and cost structures. It’s not surprising to witness major players such as Vanguard and iShares providing numerous index funds that follow various indices ranging from general market indicators to specific industry segments. Thanks to modern portfolio management And with regard to technology, most of these funds closely follow their indexes, keeping the tracking error minimal. Additionally, they boast high tax efficiency thanks to their low trading activity. In such an environment, the primary tool remaining for index fund managers to stay competitive is pricing. When all other factors are similar, investors typically opt for passively managed funds that track the same index but come with lower fees—big players understand this well...