brewer12345
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
- Joined
- Mar 6, 2003
- Messages
- 18,085
FD, I can see only a few reasons to buy a managed fund, especially snce there is such a proliferation of index funds these days:
- When a managed fund offers exposure to an asset class that you cannot buy an index fund for. I'm still waiting for a non-USD bond index fund, so in the meantime I choose to own GIM. Still waiting for the Venezuelan Beev3r cheese futures index fund...
- When the asset class is very illiquid/idiosyncratic. High yield munis is something I would want a very sharp manager running, not an index.
- When the active manager is willing to work cheap and appears to have a good track record. I am thinking of Wellington, for example.
That's about it. Other than that, I suppose you can make a case that you have found a truly superior manager running a mutual fund, but I reserve the right to be skeptical/laugh at you.
- When a managed fund offers exposure to an asset class that you cannot buy an index fund for. I'm still waiting for a non-USD bond index fund, so in the meantime I choose to own GIM. Still waiting for the Venezuelan Beev3r cheese futures index fund...
- When the asset class is very illiquid/idiosyncratic. High yield munis is something I would want a very sharp manager running, not an index.
- When the active manager is willing to work cheap and appears to have a good track record. I am thinking of Wellington, for example.
That's about it. Other than that, I suppose you can make a case that you have found a truly superior manager running a mutual fund, but I reserve the right to be skeptical/laugh at you.