Active ETFs Playing a Bigger Role But Some Hurdles Remain to Widespread Adoption
Justin Kuepper
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Let's take a look at some of the key takeaways from the survey...
If the length of a fund manager’s tenure is related to their ability to provide superior performance, then it should be a factor in explaining the size and persistence of fund returns. Unfortunately, as is true with much of the “conventional wisdom” about the mutual fund industry, the data simply doesn’t support the belief.
They began by focusing on the careers of mutual fund managers who are in sole control of their funds. To avoid the problem of survivorship bias, their study covers the period from 1996 through 2008. The data set incorporated 2,846 funds and 1,825 managers, and included 195 funds with managers that had at least 10 years of experience (6.9 percent of the total). Their research resulted in three key findings:
The authors concluded: “The key to a long career in the mutual fund industry seems to be related more to avoiding underperformance than to achieving superior performance.”
The bottom line is that this study provides further evidence against active management as the winning strategy. Rather, the winning strategy is to use passively managed funds to implement your financial plan. Passively managed funds, as a category, include not just index funds, but also funds whose construction rules are transparent, systematic and based on historical evidence.
Receive email updates about best performers, news, CE accredited webcasts and more.
Justin Kuepper
|
Let's take a look at some of the key takeaways from the survey...
Aaron Levitt
|
As wage gaps continue to grow, executive compensation is now in the crosshairs...
Justin Kuepper
|
Let's take a look at what bonds investors may want to consider and...
Mutual Fund Education
Justin Kuepper
|
Let's take a closer look at how ESG investments have outperformed during the...
Mutual Fund Education
Daniel Cross
|
While CITs and mutual funds share many similarities, there are some key differences...
Mutual Fund Education
Sam Bourgi
|
The phrase ‘bear market’ has been thrown around a lot lately, but it...
If the length of a fund manager’s tenure is related to their ability to provide superior performance, then it should be a factor in explaining the size and persistence of fund returns. Unfortunately, as is true with much of the “conventional wisdom” about the mutual fund industry, the data simply doesn’t support the belief.
They began by focusing on the careers of mutual fund managers who are in sole control of their funds. To avoid the problem of survivorship bias, their study covers the period from 1996 through 2008. The data set incorporated 2,846 funds and 1,825 managers, and included 195 funds with managers that had at least 10 years of experience (6.9 percent of the total). Their research resulted in three key findings:
The authors concluded: “The key to a long career in the mutual fund industry seems to be related more to avoiding underperformance than to achieving superior performance.”
The bottom line is that this study provides further evidence against active management as the winning strategy. Rather, the winning strategy is to use passively managed funds to implement your financial plan. Passively managed funds, as a category, include not just index funds, but also funds whose construction rules are transparent, systematic and based on historical evidence.
Receive email updates about best performers, news, CE accredited webcasts and more.
Justin Kuepper
|
Let's take a look at some of the key takeaways from the survey...
Aaron Levitt
|
As wage gaps continue to grow, executive compensation is now in the crosshairs...
Justin Kuepper
|
Let's take a look at what bonds investors may want to consider and...
Mutual Fund Education
Justin Kuepper
|
Let's take a closer look at how ESG investments have outperformed during the...
Mutual Fund Education
Daniel Cross
|
While CITs and mutual funds share many similarities, there are some key differences...
Mutual Fund Education
Sam Bourgi
|
The phrase ‘bear market’ has been thrown around a lot lately, but it...