It has become common knowledge, except perhaps among the public, many of whom continue to buy managed mutual funds, that securities indexes outperform most managed mutual funds. What is more, this usually occurs year after year.
And in cases where a fund manager may do better than an unmanaged indexed fund or exchange traded fund (ETF), that manager often will not repeat such success in following years.
Also, managed funds have higher expense cost for fund stockholders. Indexed, unmanaged mutual funds have a decided advantage.
In a new research study done by Morningstar, Inc., another positive factor has been added. When risk taken by an average fund manager to attempt to outperform an index is considered, that manager’s efforts were found to have accomplished even less for the investor.
The additional risk of paying for management simply did not pay off.
No comments:
Post a Comment