It’s Difficult to Beat the Index Fund

By on February 24, 2009

Mark Hulbert reports at the New York Times that a new study by Mark Kritzman, president and chief executive of Windham Capital Management of Boston, shows that index funds outperform actively managed funds and especially hedge funds. Most of the outperformance is due to lower expenses; especially taxes. Even in tax advantaged accounts, index funds proved superior.

The investment implication is clear, according to Mr. Kritzman. “It is very hard, if not impossible,” he wrote in his study, “to justify active management for most individual, taxable investors, if their goal is to grow wealth.” And he said that those who still insist on an actively managed fund are almost certainly “deluding themselves.”


Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>