A Managed Mutual Fund Not Doing Well?

The question of what to do when a managed mutual fund is not doing well has little to do with holding or selling or the merits of its management. Instead, it concerns whether you should have anything to do with a managed mutual fund.

I have always commented that indexed mutual funds or exchange traded funds ( ETFs), are better than managed funds. They usually outperform them, and at lower cost.

Moreover, the lower the fund cost, the more return an investor will get over the years.

This question also will come up when a managed mutual fund you may have gets merged into another. These mergers are usually done for either or both of two reasons. To get economy of scale. Or to hide losing records.

In most instances, index funds or exchange traded funds are always a better choice. So, don’t attempt to trade managed funds on relatively short term performance.

Besides, their internal managements generally change constantly. (See the Earl J Weinreb NewsHole® comments.)