Also, NOBODY pays 1% for investment management anymore. You can open a brokerage account in the US and pay .08%(yes, from private investment companies) and get a very diversified portfolio using standardized funds.
I really don't see the benefits of a centralized pension...other than being able to offload payments to future generations, ofcourse.
LOL, look it up. This is the average annual fee for super funds in Australia
You can view the Norway fund's holdings on their website: https://www.nbim.no/en/the-fund/holdings/holdings-as-at-31.1...
It seems pretty diversified to me!
A larger fund also has advantages for ROI (even putting aside the much lower fees) because you can be a more activist shareholder and invest in more sophisticated ways.
>>A larger fund also has advantages for ROI (even putting aside the much lower fees) because you can be a more activist shareholder and invest in more sophisticated ways.
Small fund managers are free to invest in large funds to gain these advantages. They have the added advantage of being able to select from smaller cap investment options as well.
There are advantages to having hundreds of thousands of individual accounts over one sovereign wealth fund. The latter is a case of putting all your eggs in one basket. Centralization poses enormous risks.
Reducing fees by having a smaller number of fund managers managing a larger amount of capital can also reduce the ROI, as a result of fund managers having to limit their objects of investment to very large companies/projects that can efficiently utilize large capital infusions.