Shouldn't the charges on a (passive) index tracker generally be lower than on an actively managed fund given that the latter presumably involves more hands on work by the fund manager?How much more (in terms of AMC) would one be willing to pay to access a global index tracker Vs an actively managed global equity fund?
0.25% pa ? More ? What's the general expectation on the level of outperformance on one Vs the other?
Shouldn't the charges on a (passive) index tracker generally be lower than on an actively managed fund given that the latter presumably involves more hands on work by the fund manager?
How much more (in terms of AMC)
But even ignoring transaction costs, surely an actively managed fund involves more work and consequently a higher AMC compared to a (passive) index tracker?Not talking about the additional Other Ongoing Costs/CIVs or Portfolio Transaction Costs that all types of funds have at all. Talking about base cost to access the provider (as a starting point, before we get into the nitty-gritty of all costs) eg. pay a 1% AMC to access an index tracker V's (say) 0.75% to access an actively managed 100% equity fund. Clearly, the OP is putting a 'value' on access to the index tracker.
What does SLAC stand for?If your PRSA is with SLAC
To be fair there are 6 different acronyms here that may be unfamiliar to a layperson.Higher OOCs/CIVs and PTCs (mainly PTCs), yes.
That's the risk/price you pay in the hope that active does better than passive.
If your PRSA is with SLAC you're paying them an AMC for it to be with them. Then you're paying the fund charges on top of that.
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