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Contrary to popular belief, random investments can outperform managed funds.

Findings

Additional insights we found via NerdWallet's Smart Money Podcast

  1. The biggest selling point of mutual funds is that they're usually actively managed, meaning they're commonly managed by portfolio managers who actively buy and sell shares.

  2. With an "actively managed" fund, investors benefit from managers who are trying to outperform the fund's benchmark when trading shares (a way to measure the fund's performance).

  3. However, actively managed funds can be more expensive than others.

  4. Some experts argue that one-off investments can sometimes be better for your portfolio than an actively managed investment.

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