Passive vs active debate comes full circle

Cost and value were the central factors in the active or passive debate 15 years ago and it is much the same today, the major difference being that funds find themselves in competition with their own peers rather than each other

Passive funds are becoming more low cost while active funds with proven added alpha can command higher than typical fees, a process expected to accelerate. Products in the middle, the mediocre actively managed and high cost trackers, are likely to be the most affected in the fall out of this growing trend. Changing regulations regarding distribution, added competition and a renewed focus on value-for-money post the credit crisis has reignited the decades-old debate of passive versus actively managed funds. Cost and value has always been central to the debate of passive versus active. ...