Last week the Pennsylvania State Employee’s Retirement system, a cousin of PSERS, replaced the Blackrock Alpha Tilt Fund with the Blackrock Equity Index Fund.  The alpha fund tries to beat the return of the S&P 500 and the equity fund simply tries to imitate the S&P’s return.  The alpha fund charges .28%/yr and the equity index fund charges .18%/yr.  Why doesn’t SERS simply invest in a low cost ETF that mimics the S&P without the active management component and corresponding higher fee for .06%?
Let’s pretend it’s your own investment account:  $200,000 invested for 20 years at 6% growth
                                                          Expense Charge %      Annual Fee Amount   20 Year Cost
BlackRock Alpha Tilts Fund                            .28                             $580                   $20,600
BlackRock Equity Index Fund                         .18                             $360                   $13,243
Vanguard S&P 500 ETF (VOO)                       .06                             $120                   $4,414
The Average Individual Investor pays               1.30                            $2600                  $95,426
If you don’t know what you are paying for investment management fees, perhaps it’s time you ask!!!!  Unless, it’s your priority to add to the Wall Street bonus pool!



Get the latest blog posts conveniently delivered to your email.

By submitting this form, you are consenting to receive marketing emails from: Addis Hill, Inc., 200 W. LANCASTER AVE, WAYNE, PA, 19087, You can revoke your consent to receive emails at any time by using the SafeUnsubscribe® link, found at the bottom of every email. Emails are serviced by Constant Contact