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Another New Study Confirms It: Actively Managed Funds Almost Never Beat The Market

TedTed
in Fund Discussions
FYI: It’s the active-passive paradox – almost every investor agrees that it’s nigh impossible to beat the market, and almost every investor tries to anyway.
Regards,
Ted
http://money.com/money/5651576/vanguard-active-funds-performance/

Comments

  • Sven
    Now you tell me, except the key is almost never. Investing is more than just absolute performance.

    It is often equally important to review the loss during severe drawdown periods and the recovery duration. Take your pick during 2000-2002, 2008, and the 4 quarter 2018. For those who are subscribed to MFO premium you can review your holdings and get better picture of your overall portfolio.
  • rforno
    edited August 2019
    If a decently-priced active fund trails the market but offers a smoother (or contrarian) ride, I'll take that any day over market-capped index funds -- especially if it meets my criteria for generating returns and investor comfort ... especially if 'the market' return is generated mainly from a handful of companies (cough, FANGs).
  • MarkMark
    edited August 2019
    It's my belief that active funds are for active investors who want to or are willing to switch to better performing funds as the needs arise or are called for. Yes the hot performing active fund may eventually revert back to the mean which is why one would switch to the rising star. If you don't want to play that game or stay on top of the performance of your chosen funds then by all means buy the index.
  • MikeMMikeM
    edited August 2019
    I understand your point @Mark, but studies show switching to "better" performing funds is a losers game. The total return will be much less than holding on to your chosen funds. I guess the trick is choosing well managed funds with a tract record and sticking with them.
    edit:
    And I think the Charle's owl funds are a great place to start.
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