Fisher Investments believes mutual funds generally don't make sense for larger investors for a variety of reasons, including overall performance and costs associated with most funds.
Why Mutual Funds Don't Make Sense for Larger Investors
Fisher Investments' research discovered that many high net worth individuals who invest in mutual funds own between 5 and 10 funds. The mutual fund industry has been growing rapidly for over a decade, and that growth has meant high turnover in fund professionals. Funds may be managed by people who've hopped from one firm to another or by inexperienced managers. According to Morningstar, many have been managing their respective funds for an average of only five years.
Over-diversification
We've found the average mutual fund owns over 220 stocks*—and with many investors holding multiple mutual funds in an effort to diversify, they could own thousands of individual securities! This is no longer diversification—it is over-diversification
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