Is Active Portfolio Management Worth the Rewards?
There is a constant debate, not only in the academic world but also in the practical investing world, on whether active portfolio management is better or passive investment is more rewarding in the long run. Indeed, it is high time investors take cognizance of the fact that the average outperformance of active funds is shrinking gradually and at times there is no outperformance visible even after several years of remaining invested in a fund. Especially if we look at the developed world for outperformance by active fund managers, it is not unusual to be disappointed.
It seems like stock-picking has a terrible track record and an even worse situation for investors in actively managed funds is that the track record is getting worse. So how bad is active fund management really? And which are the funds with a terrible track record that one should avoid? What is the pattern of such funds that underperform? How come only a handful of fund managers outperform? If you want to know the answers to such important and relevant questions, read our cover story on active portfolio management versus passive portfolio management.
You are not only going to enjoy reading the inputs but you may profit from the suggestions big time. The cover story may change your perspective on mutual fund investing all together. When it comes to arranging our own finances and planning for expenses and investments we usually lack discipline and preparedness. Our special story helps you exactly do that by providing a check list for the whole financial year. I hope the check list more than helps you achieve your financial goals in FY23. The markets throughout the year may remain volatile with several bumps on the way. A volatile market is always an ally for SIP mutual fund investors
Each time the market dips a SIP investor benefits by accumulating more units. So, do not worry about the short-term challenges faced by the markets and continue to invest regularly in the equity markets.
It is always nice to hear from you and understand the various problems faced by mutual fund investors. No matter what the issue is, you can share it with us for better understanding and resolution. We will surely assist you. Happy mutual fund investing!
Yogesh Supekar
Executive Editor