How To Find A Good Mutual Fund

Warren Buffet made headlines when he said that he was able to beat hedge fund managers by investing in a passive index fund. He stated that he would give a million dollars to charity if he failed in order to raise the stakes.

Timothy Armour begs to differ with the billionaire on his approach. He concedes that Buffet is right when he says that investments should be low cost and simple and that they should be held for the long-term. The problem comes in when people start to make comparisons between active investments and passive funds to see which is better.

Tim Armour says that each model is flawed and that they both have disadvantages. He points out that mutual funds have poor returns because of high management fees. It is important to note that passive funds expose investors to a 100% of the risk when the market takes a downturn.

It has been shown in the past that a long-term investment in an active fund will yield more returns than a passive one. Armour says that people should not downplay active funds. He adds that they should look for exceptional fund managers. One should look for low-cost funds and funds where the managers invest their capital alongside the investors.

The Capital Group entered into a partnership with Samsung Asset Management two years ago. The two companies work together to develop investment products for the South Korean market.

Armour was appointed the chairman of the Capital Group after the death of his predecessor known as Jim Rothenberg in 2015. He works together with Rob Lovelace and Phil Toledo to implement the strategies of the Capital Group.

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