Morningstar Principia lists nearly 2, 000 index funds but only a few dozen funds are truly of interest to a purely passive fund investor.
Or, check out the HUGE weighting semi-passive fund company DFA suggests to their expensive real estate and foreign funds where they earn double the fees (or more) of other funds they manage.
Thousands of active decisions need to be made by a passive index fund adviser.
In addition, active strategies are always more complex than a passive index fund strategy.
Or said slightly differently, the higher the fees the higher the performance hurdle for an active fund versus a passive vehicle.
WSJ: The Experts: Are High Fees Worth It for Funds With Great Track Records?
When a portfolio manager for an index fund performs additional management services, the fund is no longer passive.
Mr Mack was keen to point out that the Chinese fund would be a passive investor and that the decision was part of a strategic move to strengthen ties between the two markets.
According to the article (see below) and public documents, the fund is invested about 50 percent in passive index strategies and 50 percent in active strategies including hedge funds, venture capital, real estate and special investments.
The active versus passive debate tends to center around one actively managed mutual fund versus one index.
As studies have long shown, most mutual-fund investors are best off sticking with cheaper passive index funds or exchange-traded funds.
WSJ: Upside: Building a Dirt-Cheap Portfolio Is Getting Even Easier
There is always debate among investors as to whether style investing using index funds or a style-based asset class fund is an active management strategy or a passive one.
See my latest book, The Power of Passive Investing, for all the facts and figures on index fund investing.
My latest book, The Power of Passive Investing, documented a 90 percent probability that an all index fund portfolio, holding 10 funds in different categories, will outperform a portfolio holding 10 comparable randomly selected active funds over a 5-year period.
The active versus index fund debate raged on during 2012 as more investors shifted their portfolios to passive strategies.
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.
FORBES: In which Downtown Josh Brown solves the volume riddle
Unlike their ETF predecessors, which typically provided passive exposure to a particular index of stocks, bonds or other asset class, this fund changes its weightings (in other ETFs) based on momentum in the market.
FORBES: Taking A Smoother Ride In An ETF That Makes Market Timing Calls
With one fund you own 3, 797 stocks across the globe managed in a successful, passive approach to investing.
Ms Gee recommended that investors ask about the TER (total expense ratio) rather than the AMC (annual management charge) of a fund to give a more accurate idea of ongoing costs and look out for use of passive holdings such as those used by groups including T Bailey and 7IM, which, she says, have a comparably low-cost fund of funds offering.
应用推荐