One of the biggest arguments against active management is the fee structure of actively managed funds. With an annual charge of 100 basis points or more levied on investors in active funds, even if these funds track the market, they will underperform. In order for an investor to beat the market by owning an active fund, the fund would have to outperform the market by at least 100 basis point every year to justify its fee, which is almost impossible.

The classic 2/20exclusively for paying members. Access all of our content on including years of timeless investment news and in depth analysis for only a few dollars a month by signing up here while also supporting quality content and journalism, or learn more about our premium content here

If you are subscribed and having an account error please clear cache and then cookies if that does not work email support@valuewalk.com and we will get back to you as quick as humanly possible