For years, Vanguard has been rocking the world with low cost. Now the firm's CEO wants to rock it with low cost plus.

In a CNBC, Bill McNabb is reportedly closely watching the development of smart beta strategies to build out from its index products.

In the CNBC story, McNabb had this to say:

It's just another way of doing active management. It's maybe a lower cost way of doing active management and that's what gets our interest.

To bolster this point, McNabb noted that 40 percent of his firm's $2.75 trillion in assets are in active funds.

He had this to say on the subject in the CNBC story:

We think active and passive can work together, but the key point is we believe in low-cost active. If you have a high-cost active fund, it's a loser's game.

And the hits just keep on coming for active managers. 

Edited by: Tommy Fernandez


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