There are plenty of things that determine your overall returns when it comes to investing. But one of biggest happens to be how much you are paying for investments. Fees, expenses, brokerage costs, sales loads – all come directly out of your bottom line.
It’s these fees that set investors back before anything they purchase makes a gain, so finding low-cost investments continues to be a mantra for many portfolios. That’s driven people headfirst into low-cost indexing. The offshoot of this has been the continued lowering of prices to attract investors.
And Goldman Sachs just raised the stakes of this so-called fee war.
The firm has slashed its fees and brought the war into the smart beta space. In the end, the continued decline of fees only benefits investors.
Read more about the fee war of fund houses here.
Goldman’s Latest Move
The fee war has been brought by investors seeking the lowest cost for their holdings. Every penny counts. This is especially true when it comes to index funds. After all, funds tracking the same index are basically the same. They are homogenous investments. The iShares Core S&P 500 ETF (IVV) and Vanguard S&P 500 ETF (VOO) both track the S&P 500 index and track the same stocks. The way for these funds to differentiate themselves is on fees.