Headwinds Battering Active MFs

[mickeyd]

Not sure that I agree with a lot that this article says, but I do agree with the final paragraph~

Instead of looking for the most-skilled managers, Mr. Howard says, investors should “look for funds that impose the least portfolio tax, and when those burdens start to rise as the fund becomes successful and grows, there comes a point where you get out and move on.”

Barring that, he adds, buy index funds and don’t worry about beating the market.

The Headwinds Facing Active Mutual-Fund Managers - WSJ

 

[mickeyd]

Rattering? I meant Battering.

 

[Alan]

Rattering? I meant Battering.

Fixed.

 

[dtbach]

I'm about 1/2 and 1/2. I still feel a decent manager can help on the downside vs a passive which will do nothing. Has anyone seen any studies about performance of MF vs passive in declining markets?

 

[ejman]

About 1/3 of my portfolio is invested in actively managed Wellesley. I have tried to find an index fund solution with equal or better performance and equal levels of risk but have not been able to.

 

[photoguy]

Has anyone seen any studies about performance of MF vs passive in declining markets?

Generally the studies try to cover a long enough time period so that both bears and bulls are included. If the active MF managers were to do better in declines, this should still show up in the overall results.

 

[gcgang]

http://online.barrons.com/articles/return-of-the-mutual-fund-stockpickers-1420870199?autologin=y

One of the things the article mentions is that active managers perform better when rates rise, saying that from 1961-1982 active managers had on average 3.2% higher returns than S&P500. Seems like a lot of data mining to make a case for active managers.

But I think that once everyone agrees passive/index beats active, it will be easier for active to beat passive.


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