Key phrase of this article: “net of fees.” It is disingenuous for actively managed fund managers to report results “gross of fees” then claim they beat their respective index. What truly matters to the investor, and is pointed out in the article below, is fund performance net of fees vs. the index fund net of fees.
Why is this important? Fees for actively managed fund are typically much higher by several orders of magnitude. For instance, Class A shares of actively managed funds have a front end load on the order of 5% an annual fees around 1%. Contrast that with a passive index fund with no load and annual fees of 0.05%. This is a huge difference that many investors are just not paying attention to.
I encourage everyone to check the fees they are paying and have paid on their investments. Going forward, in an uncertain environment that may have lower returns than the past, fees will make a huge difference. Your financial advisor, your agent, is supposed to act on your behalf. It’s okay to trust but even better to verify.
Just say no to high fees and broken promises of market beating performance.