The public continues to buy substantial amounts of managed mutual funds that are usually outperformed by most securities index funds, year after year.
And in instances where a fund manager may do better than an unmanaged indexed fund or exchange traded fund (ETF), he or she often will not repeat that success in following years.
Also, managed funds have higher expense cost for fund stockholders. Indexed, unmanaged mutual funds thus have a decided advantage.
A research study done by Morningstar, Inc. points up another positive factor. 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.
Paying for mutual fund management simply does not pay off.
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