>Do you have a link to data which demonstrate that?<
No, just personal experience. Of course it all depends on which managed funds we're talking about. It just stands to reason that during a period of flat market performance, a balanced managed fund with a bond or other income-generating component, or a growth fund with a super-good stock picking manager, is going to outperform an index fund which is going to be dead in the water. I saw this in '94, the last relatively flat-market year we've had. Funds like Vanguard Wellington, Asset Allocation and U.S. Growth gave me a decent return, whereas Vang.Index 500 took a loss (I believe -- please don't make me go back and look it up). And during the recent correction, these same funds took less of a hit than my index funds. Now if the Dow straightlines to 10,000, the index funds may leave these in the dust, but I don't know that that's going to happen, do you? Just quickly scanning a list of Vanguard funds, there are at least a half dozen managed growth, growth & income or balanced funds that have beaten, equaled or come close to equaling Vang. 500 and Vang. Total Market over 1, 3 and 5 year periods, and some of them with significantly less risk. |
