The ETF industry’s long-running fee war may be over, at least in half the market. Elisabeth Kashner, CFA, Director of Global Funds Research at FactSet, told ETF.com’s Dave Nadig that after years of clear market signals, she’s now stumped. It turns out that a growing slice of investors have stopped shopping on price entirely. In segments like actively managed large-cap growth or unconstrained bond funds, money is flowing toward pricier products with strong recent performance, not toward the low-cost alternative. Kashner’s read is that investors are chasing yield, momentum, or a hot theme, and judging funds by track record rather than expense ratio. Meanwhile, vanilla beta products and idiosyncratic factor/ESG funds are still playing by the old rules, where the cheapest option keeps winning.
The result, as Nadig put it, looks like a K-shaped ETF market: at the bottom, commoditized products keep getting cheaper. Corgi, a newer ETF issuer, is a case in point, disrupting and undercutting in the leveraged ETF space the way Vanguard once flattened plain beta fees. At the top, active managers with their proprietary strategies get to keep charging up, so long as the outperformance holds. PIMCO’s bond fund PYLD, which has posted top-quartile returns despite higher fees than a cheaper peer, is a notable example of this. Kashner also makes the observation that first-mover advantage erodes fast once due diligence shifts to costs, but that shift is much harder to force in active management than in plain index tracking. Whether this bifurcation is a rational response to a more sophisticated, differentiated market or just performance-chasing dressed up as strategy remains the open question.
Read Elisabeth Kashner’s full insights here.
Permalink | © Copyright 2026 etf.com. All rights reserved
