(Bloomberg) -- William McNabb, chief executive officer of Vanguard, said the cost of investing will keep falling as more money shifts to passive investments and competition across the industry drives prices lower.

McNabb, whose firm manages $3.8 trillion, said investors pay an average of 12 cents per $100 for Vanguard’s mutual funds and ETFs and that in five years that number could fall below 10 cents.

“It will be less than it is today,” he said in an interview Tuesday on Bloomberg Television.

Asset managers, including Fidelity Investments, BlackRock and Charles Schwab, are engaged in a race to the bottom on fees in a bid to attract money to the fast-growing U.S. ETF market. In some cases, competitors have undercut Vanguard’s prices.

In the 12 months ended Sept. 30, investors pulled $303 billion from actively-managed mutual funds and ETFs while adding $437 billion to funds that mimic indexes, according to Morningstar.

“I don’t think we have seen the end of active management,” said McNabb. “But anyone who is a high-cost active manager will struggle.”

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