Trading costs hit returns leading fund managers down the route of compromise


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Originally published at: http://whichinvestmenttrust.com/trading-costs-hit-returns-leading-fund-managers-down-the-route-of-compromise/

Slavishly tracking a stock market index can prove a substantial drag on performance, but to avoid high costs, compromises need to be made. I’ve been considering the options and their consequences. Whether a fund is run actively or passively the question of balancing between faithfully following the model or process and incurring trading costs is…