The SA fund management industry is sophisticated, professional, internationally adept … and expensive. The question is whether this expense is justified and if not, are the costs of investing the hard-earned cents of retirees coming down? In some ways, the second part of the question is the easiest to answer; costs are coming down and respectably fast. Part of the reason is that the SA industry is tightly bound to trends in the international industry, and the megatrend internationally has been a drop in the cost of investing. That decline, which amounts, loosely speaking to a 50% drop across fund categories over the past decade, is closely linked to the growing popularity of tracker funds. [These] merely follow an industry index of one kind or another, and because they require no discretion on the part of the investors or their agents and are generally much cheaper for that reason. The growing international popularity of tracker funds helps to explain why SA investors are paying mor...

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