Warren Buffett has staked $1 million for charity this year to prove that investing in an S&P 500 passive fund will produce higher returns than a group of hedge fund managers. Tim Armour agrees in his wisdom that many hedge funds yield average returns, partly due to the high management fees and excessive trading. On the other hand, the opportunity costs and volatility risks of passive index investments are not precisely known.
Though Index funds have their place, they provide no cushion against down markets. The average actively managed fund has done worse than the market over an extended period, but there are exceptions to this in the likes of American Funds and a few others. There is no a precise way to determine which funds will outperform but on can use filters such as low expenses and high manager ownership to make a judgment. With many Americans retiring the real talk should be about the right steps, this investor can take to earn higher returns.
Tim Armour is the chairman of Capital Group, an American Financial Services company based in Los Angeles, California. The company manages over $1.4 trillion in assets for its clients and is one of the world’s largest investments firms with offices around the globe. They are focused on delivering superior results to their customers who include long-term individual investors and financial institutions around the world through products such as American Funds, one of the largest mutual funds families in the US.
Mr. Armour is an alumnus of Middlebury College where he graduated with a Bachelor’s Degree in Economics. He then started off his 34 years of investment experience at Capital as a participant in The Associates Program. He later worked in the same company as an equity investment analyst, covering global telecommunications and U.S service companies. At the time of his election as chairman of the group, Tim Armour served as the chairman of Capital Groups management committee and Capital Research.