Report card for active managed mutual funds. 7/9/2017

Many investors ask, “If it is better to have their money actively managed by a professional or to passively invest in a market index at a lower cost?” To help answer, let’s look at some interesting statistics.

Per a Jan. 19 article by Charles D. Ellis in the Financial Times, “over 10 years, 83 percent of active funds in the U.S. fail to match their chosen benchmarks; 40 percent stumble so badly that they are terminated before the 10-year period is completed and 64 percent of funds drift away from their originally declared style of investing. These seriously disappointing records would not be at all acceptable if produced by any other industry.”

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