In those markets, a traditional index mutual fund will be a far better choice.
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By contrast, with a traditional index mutual fund, "you're always buying at the net asset value, " Mr. Goldie notes.
Acquisition cost vs. a traditional index mutual fund is no longer a consideration.
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Not only did the average actively managed mutual fund underperform its comparable index fund net of fees, but it was also almost impossible to identify actively managed mutual funds that could outperform their benchmarks on a consistent basis.
Team Active has been engaged in a desperate plea for help in an industry that seems to give birth to a new ETF every week, making them costly, and as outdated as the mutual index fund.
In these cases, the ETF becomes riskier than the index it tracks and a lack of commission may not be enough to justify the additional risk over buying a mutual fund that tracks the same index.
The active versus passive debate tends to center around one actively managed mutual fund versus one index.
Finally, consider index funds if you want to minimize mutual fund management expenses and trading costs.
And they understand that mutual fund performance rarely beats an index they can purchase.
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Looking at the investment world, most hedge fund and mutual fund managers could point to index-crushing returns if the crystal-clear notion of hindsight were an input.
According to Bateman, Huntington created a rotating markets mutual fund ( HRITX) in 2001 that was designed to add value to the index fund process.
Assets were flowing out of traditional brokerage accounts and into mutual fund firms in order to gain index fund exposure.
The forum title was named after John Bogle, founder of Vanguard mutual funds and the father of low-cost index fund investing.
Investors, they say, have done no better with the average mutual fund than they could have done by purchasing an index fund.
What matters is that once again the truth about high mutual fund fees is being exposed and the benefit of index investing is being propagated.
Among this group were investors in index funds such as those of Vanguard, a mutual-fund company with a reputation for counting the pennies, which would surely have claimed if it could.
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Vale also accounts for 13% of the index, while it is just 6.3% of the Dreyfus mutual fund.
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As studies have long shown, most mutual-fund investors are best off sticking with cheaper passive index funds or exchange-traded funds.
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The average exchange traded fund (ETF) does have a lower expense ratio than the average traditional mutual fund, but not less than most low-cost index funds that have been available for decades.
The public is sitting in passive index ETFs now, no need to trade or to have a broker or mutual fund manager buying and selling things on their behalf.
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If you load up on too many international ETFs and mutual funds you can wind up with a very expensive, and inefficient, index fund.
In addition, hedge fund managers, unlike mutual fund managers, aren't judged by how well they perform against an index but by how strong their profits are in a given year.
So while oil major Petrobras accounts for 13% of the Bovespa index, and therefore the iShares Brazil ETF, it accounts for just 9.4% in the mutual fund.
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Is this the future of the actively managed mutual fund: a bunch of ingredients thrown into the mixing bowl and hard to replicate by an index?
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