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What you say could be true for the nominal return, but actively managed funds typically have to do ~2% better to just compete with index funds considering the t
by supahfly_remix 8y ago
What you say could be true for the nominal return, but actively managed funds typically have to do ~2% better to just compete with index funds considering the total return (i.e., including management fees). Some Vanguard funds have fees as low as 0.01%.
- Moodles 8y agoI’m talking about a Nash equilibrium for the investor who decides to invest in an index fund or an active fund for their own profit. So management fees are subtracted from either choice. Intuitively what I’m saying is pretty trivial: if one choice is obviously better then everyone would go for it, making the other choice better.