Wednesday, October 16, 2013

Investment Facts: Nobel Prize Edition

  1. The fees charged last year for actively managed mutual funds averaged 0.92%, which was seven times higher than the average fees of 0.13% for passively managed index mutual funds in 2012. 
  2. Empirical evidence shows that passively managed index funds outperform almost all actively managed funds over long holding periods, adjusted for risk, taxes and expenses.
  3. And yet there was almost nine times more money invested in actively managed mutual funds at the end of 2012 ($11.74 trillion) than in passively managed index funds ($1.31 trillion).
Source: The Investment Company Institute’s 2013 Investment Company Fact Book (53rd edition).

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