Competition watchdogs use the Herfindahl-Hirschman Index (HHI) as one measure to assess how competitive or concentrated an industry is. Values above 2,500 describe a highly concentrated industry with limited competition. Or rather, they typically describe oligopolies where a handful of businesses control the market.
An industry responsible for massive reductions in costs and increases in efficiency is itself keeping costs up and efficiency down....plus there's no easy way to break this in the way that indexing broke active management.
Is "direct indexing" + blockchain smart contracts the answer?
Could open source/public indices, published by a university eg., be an answer? And how about the option to compare certain ETFs with each other? At the end of the day, costs are already pretty low, but for new companies with small AUM it gets difficult to set up new ETFs, I guess.
as a BLK shareholder I am quite happy. Although, indexes seem so easy to make i don't understand why so few do them? Whats the barrier to entery in this space?
This post is a real eye-opener.
An industry responsible for massive reductions in costs and increases in efficiency is itself keeping costs up and efficiency down....plus there's no easy way to break this in the way that indexing broke active management.
Is "direct indexing" + blockchain smart contracts the answer?
Could open source/public indices, published by a university eg., be an answer? And how about the option to compare certain ETFs with each other? At the end of the day, costs are already pretty low, but for new companies with small AUM it gets difficult to set up new ETFs, I guess.
as a BLK shareholder I am quite happy. Although, indexes seem so easy to make i don't understand why so few do them? Whats the barrier to entery in this space?