Cost Of Funds Revisited

In Burton Malkiel’s Wall Street Journal column concerning the cost of investment advice, he points out that there are significant economies of scale in the asset management industry. It costs the same amount to buy 20,000 shares of a stock as it does to buy 1,000 shares. Filling an annual report with the SEC costs the same amount whether you have $100 million fund or $5 billion fund. His point is that the larger the fund, the lower the per unit cost. High volume is the reason Wal-Mart is able...