Investing inactive funds: What’s the point? By Natsuko Waki
Ă‚Â March 19, 2012 Active vs passive investment is a long-lasting debate: active funds will tell you they deliver alpha (extra returns), but for a fee. Passive investment simply tracks the index so it’s cheaper. TheĂ‚Â riskĂ‚Â isĂ‚Â you may under-perform yourĂ‚Â peers. New research from Thomson Reuters Lipper throws upĂ‚Â an interesting twist in the debate: It found thatĂ‚Â less than half of theĂ‚Â actively managed mutual funds in Europe outperformed their benchmarksĂ‚Â over the past 20 years. …
ETF Portfolios will transform investing By Philip Salter
Monday 12th March 2012 Picking exchange-traded funds is as tricky as choosing the right equity – but off-the-shelf solutions will open up these efficient products to more investors THE inability of many active managers to beat their index over a year should shock investors. Their failure over a longer period of time should have them running for the hills. Through luck or judgement some outperform, but often not for long, …
Underperformance Rife Among Active Fund Managers By Chris Flood Writing for the FT
Almost three-quarters of actively managed US large-cap funds failed to outperform the S&P 500 over the past three years, according to an analysis by Standard & Poor’s. S&P has constructed a scorecard that summarizes the performance of active managers in different categories across one, three and five years compared with a relevant benchmark. The study calculated average returns for each fund group weighted by the size of each fund constituent. …