Investors buy managed mutual funds though most fund managers rarely beat securities averages. That is why more and more are turning to the use of indexed mutual funds and related Exchange Traded Funds( ETFs).
Index mutual funds and ETFs are generally much lower-cost than managed funds. Low cost is the most important investment factor you can rely upon for long-term results.
And when some managers do better than indexes in a particular type of fund, they sometimes get nervous. Then, they play it safe and merely attempt to emulate the averages the rest of the year. They may be afraid to defy odds of being successful, compared to indexes.
I have always suggested the use of index funds. Especially because large mutual fund portfolio managers tend to find it so difficult to outperform indexes. (See the Earl J. Weinreb NewsHole® comments.)
No comments:
Post a Comment