Low Cost Investing: More Than Just ETFs

Morningstar are unfaltering supporters of low-cost investing, but there are significant differences between passive and low-cost investing

Dan Kemp 29 May, 2018 | 11:56AM

Warren Buffett continues to solidify his reputation as one of the most likeable, warming, thoughtful investors to have graced the planet. Yet in his public dialogue over the past 10 years, he has inadvertently contributed to the changing face of investing.

More specifically, his advocacy for everyday investors to use low-cost passive investment vehicles, along with the likes of Jack Bogle, the founder of Vanguard, has contributed to a growing pool of support towards the ascendancy of low-cost investing. In fact, the rise of passive funds has resulted in a 537% increase in total assets since 2007 versus only 137% for active funds.

Worldwide fund flow data (including ETFs) shows the remarkable trend in favour of passive investing

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About Author

Dan Kemp

Dan Kemp  is Chief Investment Officer, Morningstar Investment Management EMEA

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