Luckily, there is now a class of fund that not only
carries low trading costs, but routinely outperforms its benchmark.
Not exact matches
Selling gold short has therefore been an alternative to the «yen -
carry»
trade which saw market participants fund investments in various markets by borrowing yen (at almost zero
cost due to the
low interest rates in Japan) and selling it for other currencies, mostly US dollars.
Synthetic gold is the perfect substance for a
carry trade: an easy borrow with very
low carrying cost and little upside basis risk.
Such investment vehicles have
low costs simply because they forgo the research and
trading that active managers
carry out.
Since index funds don't
carry the expenses of an active fund manager, from sales commissions to
trading costs, they charge much
lower fees than actively managed funds.