A common refrain I hear today is that the average actively managed mutual fund cannot outperform the S&P 500 Index, so why would you invest in it? But here’s my problem — I cannot find that so-called “average” active fund. And for good reason … there is no such investment.
Beyond Benchmarks
What this sweeping statement fails to take into account is that by speaking in averages, you lose the ability to understand and examine the key components of an actual actively managed fund — not a hypothetical representation. To analyze an active fund, an investor must review the fund’s style, management approach, fees, risk, return, management team tenure and experience, along with myriad other details.
When investors use broad generalizations about the average actively managed fund to avoid investing in these funds altogether, they overlook a few important points. Read the rest of Jeff’s blog to find out the key points and more.
Jeffrey Hemker is the National Sales Manager, Retirement Division, at Invesco.
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