Warren Buffett has many times that there are far too many actively managed funds that do their investors a big disservice with excessive fees, too much trading, and performance that can’t even beat the market. He advises buying a low-cost index fund that follows the S&P 500 as his preferred strategy.
Tim Armour, the CEO and Chairman of the Board for Capital Group, has said that he agrees with Mr. Warren Buffett that many actively managed funds are mediocre at best. However, he says that there are ways to find active funds that provide great returns, The trick, he said, is to find ones that have low fees and, most importantly, have a large part of the fund managers own personal funds invested in it. He said that, by having skin in the game, these fund managers are motivated to do the research required in order to beat the market and deliver superior returns.
Tim Armour has been a long time advocate of investors looking for active fund managers who “earn their keep”. He says that if the manager can’t beat the market their clients need to find someone who does. He has pointed out that many of the actively managed funds that Capital Group offers beat the market both in the short and long term.
The company that Tim Armour leads, Capital Group, is one of the oldest investment management firms in the world. The company was founded in 1931 in Los Angeles, California. Mr. Armour also responsible for the company’s other offices that are located around the world.
Learn more about Tim Armour: https://littlesis.org/person/51109/Timothy_D_Armour