More Bad News for Mutual Funds
| Jan 25th, 2007 | Filed under: Investment Management Fees | By: Alpha Male |
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“Improved Study Finds Index Management Usually Outperforms Active Management”
By: Millicent Holmes, Brownson, Rehmus & Foxworth Inc.
Published: Journal of Financial Planning, January 2007
The debate over whether hedge funds produce any alpha is essentially the same as the age-old debate between active and passive management. This recent piece of research weights in on the state of actively managed mutual funds and it doesn’t look pretty. According to the study, active managers add value (i.e. beat their benchmarks) in US mid-cap value, US small-cap blend and international small & mid-cap blend classes only. On average, active managers in all other asset classes under performed their comparable index funds.
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