A class action suit filed in the US on 29 December 2015 could support the case for active fund management. The case against Anthem Inc, a US healthcare company founded in the 1940’s, criticises fiduciaries of the Anthem 401(k) plan for choosing several funds offered by Vanguard, a pioneer of low-cost funds. In its complaint, the plaintiffs argue that Vanguard has been offering “low cost funds” to customers since at least 2008, and they have not chosen any other fund. the 401(k) industry has faced over the last several years, which have focused on excessive investment management and record keeping fees, and this case may see them reviewing the way they fulfil their obligations. Jason Roberts, CEO of the Pensions Resource Institute said the case bodes well for active management, whether it sticks or not, as it raises the importance of value rather than simply looking at fees in a vacuum.
A class action suit filed in the US on 29 December 2015 could support the case for active fund management. The case against Anthem Inc, a US healthcare company founded in the 1940’s, criticises fiduciaries of the Anthem 401(k) plan for choosing several funds offered by Vanguard, a pioneer of low-cost funds. Fiduciaries may have been swayed by a series of lawsuits the 401(k) industry has faced over the last several years, which have focused on excessive investment management and record keeping fees, and this case may see them reviewing the way they fulfil their obligations. Jason Roberts, CEO of the Pensions Resource Institute said the case bodes well for active management, whether it sticks or not, as it raises the importance of value rather than simply looking at fees in a vacuum.