It is well documented that on average
active mutual fund tends to underperform the market. However, there is now a
further issue with mutual funds according to the recent research of Antti Petajisto formerly of Yale
University and now at Blackrock.The problem is this. The point of
owning a mutual fund is paying a team of analysts to pick stocks on your
behalf, but according to this research, a significant group of mutual funds are
no more than “closet indexers”, closer to following the market than trying to
beat it. This matters because not only are you paying a high fee, you aren’t
getting what you might expect. It’s a little like paying a premium for Gucci
loafers and then discovering that the shoes you received are remarkably similar
to a pair from Walmart.
This web site is dedicated to investment fund investor education and protection. The multi-billion fund industry plays a key role in the savings and retirement plans of millions of Canadians. Many industry practices provide beartraps for the unsuspecting investor and securities regulations have not kept up with the pace of change in the industry.
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