HEAD-TO-HEAD: iShares vs Vanguard

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For passive funds, managers have a limited scope to make any changes to improve the tracking or the performance of the fund and most parts of the process are automated, Lamont said.

“The difference between one team and the next is based on technology. The human element is not what it is in the active world. The manager of a passive fund relies quite heavily on the fund management software.

“Both funds are managed by seasoned passive management teams with highly-advanced automation tools,” he said.

The iShares team is led by Kieran Doyle, the firm’s vice president and portfolio manager. Currently, Doyle oversees 47 funds with the AUM of £56.3bn ($78.4bn).

Behind the fund is the passive fund management industry giant Blackrock and more importantly the firm’s technology advancements.

“Not only do they have the very best personnel, but they also can benefit from their market-leading technology, such as fund management software, which they actually sell to their competitors,” Lamont said.

“Obviously, it is a scale game and being the giant within the industry gives them advantages in trading with technology.”

The Vanguard fund is also managed by a team, but its leadership is unknown.

“The Vanguard fund has a very efficient process. Its procedures are extremely automated and streamlined. The firm is also a global player.”

The iShares fund may have an edge thanks to a “preferential exposure” to Blackrock’s technology.

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