When officials with Montgomery County, Pa., became troubled by their pension fund's investment fees and recent performance, they turned to a neighbor for advice. His take: Park money in low-cost index funds.
And that is what they are doing, a move that highlights the growing frustration many pension officials feel toward expensive Wall Street investment managers. The county is now shifting nearly all its $470 million in pension assets to a handful of index funds run by Vanguard Group Inc.
"The folks on Wall Street do valuable work,'' says Josh Shapiro, chairman of the Montgomery County Board of Commissioners. "But there is no value for the county and other municipalities to be spending these fees and getting a lower return."
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