The ins and outs of index investing - Pt 1

‘Active’ managed funds cost far more than index funds but are they worth it? In the first of a two-part series, Richard Livingston unveils a strategy that combines the low cost benefits of an index with the outperformance of an active approach.

We all want good performance from our investments. But most of us believe that, at least in the area of managed funds, we have to pay for it. That’s why many managed fund investors pay up to 2% a year for an active fund manager, compared with less than 0.5% in many cases for an index-tracking fund.

Often the deck is stacked against the active fund investor. You’ll pay the fees but the chances are, you won’t get the performance.

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