Poll

Are Managed Funds or Indexed Funds Better?

Managed!
Indexed!
Neither is better or worse.

Author Topic: POLL: Managed Versus Indexed Funds  (Read 4675 times)

heybro

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POLL: Managed Versus Indexed Funds
« on: October 05, 2014, 10:48:38 PM »
POLL ABOVE!

surfhb

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Re: POLL: Managed Versus Indexed Funds
« Reply #1 on: October 06, 2014, 02:05:51 AM »
Who knows which is better since we can't see in the future. 

One thing is know however.....most managed funds don't beat the indexes over longer periods.   

heybro

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Re: POLL: Managed Versus Indexed Funds
« Reply #2 on: October 07, 2014, 01:42:58 AM »
Ever since I saw a special on public TV saying that Indexed funds always out-perform, I knew I'd only go with them.

trailrated

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Re: POLL: Managed Versus Indexed Funds
« Reply #3 on: October 07, 2014, 10:00:19 AM »
Stole this from the bogleheads forum, more focused on how people pick their managed funds based on past performance.

Quote
Jack Bogle: "The biggest mistake investors make is looking backward at performance and thinking itíll recur in the future."

Frank Armstrong, financial author: "Rating services such as Morningstar's 'Star Awards' or the 'Forbes Honor Roll' attest to the futility of applying past performance to tomorrow."

Barra Research: "There is no persistence of equity fund performance."

Burns Advisory tracked the performance of Morningstar's five-star rated stock funds beginning January 1, 1999. Of the 248 stock funds, just four still kept that rank after ten years.

Wm. Bernstein, author: "For the 20 years from 1970 to 1989, the best performing stock assets were Japanese stocks, U.S. small stocks, and gold stocks. These turned out to be the worst performing assets over the next decade."

Jack Brennan, Vanguard CEO: "Fund ranking is meaningless when based primarily on past performance, as most are."

Andrew Clarke, author: "By the time an investment reaches the top of the performance tables, there's a good chance that its run is over. The past is not prologue."

Prof. John Cochrane, author: "Past performance has almost no information about future performance."

S.T.Coleridge: "History is a lantern over the stern. It shows where you've been but not where you're going"

Jonathan Clements, author & Wall Street Journal columnist: "Trying to pick market-beating investments is a loser's game."

Eugene Fama: "Our research on individual mutual funds says that it's impossible to identify true winners on a reliable basis, even if one ignores the costs that active funds impose on investors."

Gensler & Bear, authors: "Of the fifty top-performing funds in 2000, not a single one appeared on the list in either 1999 or 1998."

Ken Heebner's CGM Focus Fund was the top U.S. equity fund in 2007. In November 2009, it ranked in the bottom 1% of its category.

Arthur Levitt, SEC Commissioner: "A mutual fund's past performance, which is the first feature that investors consider when choosing a fund, doesn't predict future performance."

Burton Malkiel, author: "I have examined the lack of persistency in fund returns over periods from the 1960s through the early 2000s.--There is no persistency to good performance. It is as random as the market."

Mercer Investment Consulting from a study of over 12,000 institutional managers: "Excellent recent performance not only doesn't guarantee future results but generally leads to underperformance in the subsequent period."

After fifteen straight years beating the S&P 500 Index, Legg Mason Value manager, Bill Miller's Legg Mason Value Trust (LMNVX) is now (9-30-2014) in thebottom 1% of its category for 10-year returns .

Ron Ross, author: "Extensive studies by Davis, Brown & Groetzman, Ibbotson, Elton et al, all confirmed there is no significant persistance in mutual fund performance."

Bill Schultheis, author: "Using past performance numbers as a method for choosing mutual funds is such a lousy idea that mutual fund companies are required by law to tell you it is a lousy idea."

Standard & Poor's: "Over the 5 years ending September 2009, only 4.27% large-cap funds, 3.98% mid-cap funds, and 9.13% small-cap funds maintained a top-half ranking over the five consecutive 12-month periods."

Larry Swedroe, author: "The 44 Wall Street Fund was the top performing fund over the decade of the 1970s. It ranked as the single worst performing fund of the 1980's losing 73%. -- If you are going to use past performance to predict the future winners, the evidence is strong that your approach is highly likely to fail."

David Swensen, Yale's Chief Investment Officer: "Chasing performance is the biggest mistake investors make. If anything, it is a perverse indicator."

Tweddell & Pierce, authors: "Numerous studies have shown that using superior past performance is no better than random selection."

Eric Tyson, author: "If you had invested in the annual #1 top performing stock and bond funds over the last 15 years, 80% of those top performers subsequently performed worse, over the next 3-10 years, than the average fund in their peer group! Two of three former #1 funds are actually the worst performing funds in their particular category."

Value Line selected Garret Van Wagoner "Mutual fund Manager of the Year" in 1999. In August 2009, Van Wagoner's Emerging Growth Fund was the worst performing U.S. stock fund over the past 10 years.

Vanguard: "Buying a fund solely because it's done well in the past, or selling a fund that has performed poorly, can turn into a costly mistake." U.S. Growthhad the 2nd BEST 10-year return of all Vanguard funds in December, 1998. On December 31, 2005 U.S. Growth had the 2nd WORST 10-year return of all Vanguard funds.

Jason Zweig, author and Wall Street Journal columnist: "Buying funds based purely on their past performance is one of the stupidest things an investor can do."

waltworks

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Re: POLL: Managed Versus Indexed Funds
« Reply #4 on: October 07, 2014, 10:53:37 AM »
This is a joke, right? You might find people here who are *personally* active traders of stocks/bonds/options, but I doubt you'll find anyone who thinks funds managed by outside managers are better than indexing.

-W

Eric

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Re: POLL: Managed Versus Indexed Funds
« Reply #5 on: October 07, 2014, 01:13:51 PM »
Managed seemed so lonely that I just had to vote for him.  :(

trailrated

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Re: POLL: Managed Versus Indexed Funds
« Reply #6 on: October 08, 2014, 10:28:00 AM »
Managed seemed so lonely that I just had to vote for him.  :(

Now the graph looks like a dick

gimp

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Re: POLL: Managed Versus Indexed Funds
« Reply #7 on: October 08, 2014, 01:46:54 PM »
Some managed funds can do better, very long-term. A few even manage to survive after the expense ratio, probably. The problem is that we're unlikely to be privy to those funds - they tend to be small, and closed to outside investors.

The Mobile Mustachian

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Re: POLL: Managed Versus Indexed Funds
« Reply #8 on: October 08, 2014, 08:33:52 PM »
Vanguard's Wellesley, Wellington, and Primecap have all done very well for many years. Not bad holdings to have in my opinion.

wtjbatman

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Re: POLL: Managed Versus Indexed Funds
« Reply #9 on: October 08, 2014, 09:32:50 PM »
Managed seemed so lonely that I just had to vote for him.  :(

Now the graph looks like a dick

With one swollen testicle. Or one shrunken testicle. Guess it depends on whether you're an optimist or a pessimist.

waltworks

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Re: POLL: Managed Versus Indexed Funds
« Reply #10 on: October 10, 2014, 09:15:49 PM »
I voted for Kodos.

-W