Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
'It might seem that broad index funds that attempt to own the entire market, such as the Vanguard Total Stock Market Index (VTSMX) for US stocks and the Vanguard Developed Markets Index (VTMGX or VDVIX) for non-US stocks (or their comparable Vanguard ETFs) are nearly impossible to beat. ' T. Madell article
But funds that invest in somewhat more narrow slices of the market, as opposed to the broad ownership of nearly all stocks, as well as non-index (i.e. managed) funds, can still make sense too.
If and when this situation will change is obviously unknown, but for now at least, it appears that broad index funds with their constant inflow of new money into a given set of stocks will continue to enjoy a performance advantage over most managed funds. But, at some point, there will likely come an extended period when the higher fees charged by many managed funds will be offset by their inherent flexibility in portfolio decision making.
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