Comments on: The Secret Fund Managers Don't Want You to Know

By: Steve

Steve — Sun, 12 Sep 2010 15:50:31 +0000

So Phil – What are the names and tickers of the funds T. Rowe Price has closed? I've been with them for 12 years and I can't think of a single one.

By: Phil

Phil — Wed, 30 Dec 2009 19:01:06 +0000

You should be aware: 70% of their *existing* funds beat the average. The rest of them got shut down. Its called "survivorship bias".

By: Bret

Bret — Mon, 27 Apr 2009 20:47:20 +0000

Weakonomist,

The company that claims 70% of their funds met or beat their index is T. Rowe Price.

Actually, I think that's a lot to brag about, since 70% of other funds fail to meet their averages. And, that doesn't count all of the dog-funds that got buried by a merger. If you really could start a company and beat the averages 70% of the time, you'd be pretty wealthy. Since most pro fund managers can't do this, I'd say it's a long-shot for you.

Just for disclosure, I invest with T.Rowe Price and have been happily beating the averages for a number of years now. I sure hope it continues, since the averages aren't doing so hot. I know it's pathetic, but I'm happy to have lost less than the S&P.

By: Business & Finance Blogs » Blog Archive » Carnival of Personal Finance #202 - The Lao Tzu Edition

Mon, 27 Apr 2009 07:13:57 +0000

[...] The Secret Fund Managers Don't Want You to Know – Jason Unger, Automatic Finances [...]

By: Jason Unger

Jason Unger — Thu, 23 Apr 2009 17:01:17 +0000

Yeah, that's a great point — an index fund by its nature is not necessarily going to be diversified, especially if it only targets one sector.

Of course, you could always go The Lazy Investor's path — own something like three indexes: Total Stock Market, Total International, and Total Bond Market. You'd just have to allocate them correctly.

By: Louis

Louis — Thu, 23 Apr 2009 16:52:14 +0000

Great post. If you compare the actual dollar amount you pay in fees to an actively managed fund to an index fund over a 10, 20, or 30 year timeframe, the difference in most cases is astounding.

I would suggest that once people decide to invest in index funds, they should diversify across index funds, not just the S&P 500. Have in your mix a small company index, an international index, and depending on risk tolerance, an emerging markets index.

By: The Weakonomist

The Weakonomist — Thu, 23 Apr 2009 12:34:06 +0000

I'll always remember a mutual fund commercial that said "70% of our funds met or beat their index". Is that something to brag about? I'd be ashamed of such poor performance. I could start a company tomorrow that does better than that.