This is because finance education doesn't reach as far yet. Particularly seniors do trust from old times their mainstream banking and insurance agents who since decades distribute biased information and lead them a very wrong way, when they knew better. There are national efforts globally to educate the (poorer) masses to decide well. The mutual fund industry is eroding (or developing?) though, but is still too powerful. Mainstream banking institutions still try to discredit passive indexing and also on this board we read occasionally recommendations pro mutual funds. The escape strategy of mainstream finance to 'fish' for the clients monies is to dilute/weaken the initial passive indexing ETF idea and issuing 'active'-like ETFs under the labels; smart beta, leveraged, inverse etc.
An alternative strategy for them is to almost mirror indexes ('closet indexing') but sell them for higher fees, but thus lower performance.
That said there are two points:
#1
there are already mutual funds (unit trusts) that have very low fees, like:
https://investors.avanza.se/en/media/press/2018...
or 'no fee' (!) (?) ones:
https://www.cnbc.com/2018/09/13/fidelity-double...
#2
maybe not wise and no advertizing intended: I hold one (my single) mutual fund with an annual fee of 1.5% (= typically high) and hefty commission fees, at least with my not Sweden based online brokerage:
https://tinfonder.se/wp-content/uploads/2019/03...
I do this to combine 2 things simultaneously:
-exposure/diversification to Scandinavia (though also. U.S. stocks included)
-exposure to high tech sectors
The management team
Whether my growth hypothesis holds for that one, onky time will tell...
This is of course a high risk & high fees affair.
The 2 person managenent team earlier managed earlier a similar fund with Sweden Swedbank, which over longterm had the best performance of all swedish mutual funds. Whether this was due to the excellence of the team or just because the stocks of the chosen sectors developed anyway superbly is difficult to tell.
I repeat, honestly, this is no advertising intended, it is highly risky, it is judged by contemporary criteria expensive and it is generally against my negative thinking on active stock picking and against mutual funds.
This is because finance education doesn't reach as far yet. Particularly seniors do trust from old times their mainstream banking and insurance agents who since decades distribute biased information and lead them a very wrong way, when they knew better. There are national efforts globally to educate the (poorer) masses to decide well. The mutual fund industry is eroding (or developing?) though, but is still too powerful. Mainstream banking institutions still try to discredit passive indexing and also on this board we read occasionally recommendations pro mutual funds. The escape strategy of mainstream finance to 'fish' for the clients monies is to dilute/weaken the initial passive indexing ETF idea and issuing 'active'-like ETFs under the labels; smart beta, leveraged, inverse etc.
An alternative strategy for them is to almost mirror indexes ('closet indexing') but sell them for higher fees, but thus lower performance.
That said there are two points:
#1
there are already mutual funds (unit trusts) that have very low fees, like:
https://investors.avanza.se/en/media/press/2018...
or 'no fee' (!) (?) ones:
https://www.cnbc.com/2018/09/13/fidelity-double...
#2
maybe not wise and no advertizing intended: I hold one (my single) mutual fund with an annual fee of 1.5% (= typically high) and hefty commission fees, at least with my not Sweden based online brokerage:
https://tinfonder.se/wp-content/uploads/2019/03...
I do this to combine 2 things simultaneously:
-exposure/diversification to Scandinavia (though also. U.S. stocks included)
-exposure to high tech sectors
The management team
Whether my growth hypothesis holds for that one, onky time will tell...
This is of course a high risk & high fees affair.
The 2 person managenent team earlier managed earlier a similar fund with Sweden Swedbank, which over longterm had the best performance of all swedish mutual funds. Whether this was due to the excellence of the team or just because the stocks of the chosen sectors developed anyway superbly is difficult to tell.
I repeat, honestly, this is no advertising intended, it is highly risky, it is judged by contemporary criteria expensive and it is generally against my negative thinking on active stock picking and against mutual funds.