
#027: Andrew Beer – Cost Reduction Is the Purest Form of Alpha
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Today, with literally a few dozen dollars in your pocket, you can invest in the same things as hedge funds.The hedge fund industry is burdened with one big sin: high management costs – just like in classic investment funds.
This is probably the main source of their numerous failures. But something has been changing here for years, paradoxically partly thanks to the ongoing passive revolution (i.e.: index products). Management costs are falling, and according to Morningstar, the current average management cost among hedge funds is approximately 1.6% per year. Yes – it is still a lot if compared to passive stock ETFs, where the cost may be lower than 0.1% per year.
For several years, strategies implemented by hedge funds in the ETF package have been beginning to appear – the so-called managed futures ETFs. Here, management costs dropped below 1% per year.Today, I invite you to an interview with Andrew Beer – a man with 30 years of experience in the hedge fund industry. Some people even call him the “John Bogle of hedge funds” because he offers a very cheap (for this class of strategy) ETF.
For more please visit: https://systemtrader.show/027