May 01, 2024

Can an Actively Managed Mutual Fund Beat its Benchmark?

When it comes to selecting an investment fund manager, should investors simply try to find ones that can beat their benchmark?

When it comes to selecting an investment fund manager, should investors simply try to find ones that can beat their benchmark? Unfortunately, studies show that looking at past performance doesn't tell you much about what's likely to happen in the future. In fact, it’s rare for actively managed mutual funds to consistently outperform the major market indexes, like the S&P 500. In this episode of Buckingham Perspectives, Chief Investment Officer Kevin Grogan explains what an actively managed mutual fund is and how these funds track their performance against indexes. He also shares why looking at their past performance isn't the best strategy for investors when making investment decisions.

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For informational and educational purposes only and should not be construed as specific investment, accounting, legal, or tax advice. Certain information is based on third party data and may become outdated or otherwise superseded without notice. Third party information is deemed to be reliable, but its accuracy and completeness cannot be guaranteed. The time frame chosen because of the dates of available data. The inception of the AIEQ ETF was 2017. Indices are not available for direct investment. Their performance does not reflect the expenses associated with the management of an actual portfolio nor do indices represent results of actual trading. Information from sources deemed reliable, but its accuracy cannot be guaranteed. Performance is historical and does not guarantee future results. All investments involve risk, including loss of principal. Neither the Securities and Exchange Commission (SEC) nor any other federal or state agency have approved, determined the accuracy, or confirmed the adequacy of this information.

About the Author

Kevin Grogan

Chief Investment Officer

As Chief Investment Officer for Buckingham Wealth Partners, Kevin conducts investment research and writes articles on a wide range of topics, including retirement planning and investment policy. Kevin co-authored "The Only Guide You’ll Ever Need for the Right Financial Plan" with Larry Swedroe and Tiya Lim. This step-by-step handbook focuses on the art of investing by providing investors with information they can use to build a tailor-made investment strategy. Kevin holds an MBA from Saint Louis University and a bachelor’s of science in finance from Missouri State University in Springfield.

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