The industry’s worst-performing passively managed equity products have at least one thing in common: high fees.
In 2007, passive funds accounted for 20% of all U.S. equity assets, according to Morningstar data. Since then, that number has nearly doubled. In their search for low-cost products, clients moved $662 billion to the funds in 2017, alone. It’s no surprise that the average worst-performer cost significantly more than those at the top of the pack, explains Greg McBride, chief financial analyst at Bankrate.com.
