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Most active fund managers fail to provide any extra value to justify fees charged. The latest mid year 2016 S&P Dow Jones report makes difficult reading for most active managers and their investors. 60% of Australian general share funds underperformed the index (S&P/ASX 200) over one year and over 5 years the number is 69%. Also, the average performance of active funds lagged the index over one, three and five years.
Investing in the index can be done simply and at low cost by buying shares in Exchange Traded Funds or by investing in a managed fund which tracks the index. Investing in an index is low cost and easy to implement for a time-poor doctor or dentist. Simple, low cost and average performance. An average that is hard to beat.
Here is a link to the Spiva Australia Mid-Year 2016 report:
