Passive asset managers need to do more than just track the index if they want to charge any fee, says Alexander Forbes’s chief investment strategist Vladimir Nedeljkovic. Globally, passive managers were charging much lower fees and some banks didn’t charge anything at all on index funds, he said. In 2018, US fund manager Fidelity became the first to launch two zero-fee index funds. In SA index funds charges range from 20 basis points to around 100 basis points or 1%. “Indexation, as far as I’m concerned, should charge exactly zero fees. They don’t do anything. If the asset management industry wants to charge more than that, they need to provide demonstrable value,” said Nedeljkovic, who was speaking at the Business Day-Financial Mail Investment Dialogue on Wednesday. He said the same goes for active asset managers. He however acknowledged that some index funds are doing more than just tracking the JSE All-share Index (ALSI). He said there is a shift to tracking a host of other indic...

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