Since most managed mutual funds fail to
outperform simple index funds, and many money managers and advisors aren't going to deliver results that beat them, either, it can make good sense to just park your hard - earned dollars in inexpensive index funds, such as the SPDR S&P 500 ETF (NYSEMKT: SPY).
Academic research now suggests there may be ways to
outperform a simple index fund by investing in stocks with certain characteristics (we'll describe these in a moment).
Not exact matches
He made a famous bet that over the course of 10 years, a
simple, cheap
index fund would
outperform a group of the most prestigious hedge
funds.
On the basis of the Sharpe ratio, which is the
simplest form of risk adjustment, the
fund underperformed the MSCI EAFE
index in the three - and five - year periods but
outperformed it over the ten - and fifteen - year periods through January 2014 (see figures from Morningstar).
[92] In 2007, Buffett made a bet with numerous managers that a
simple S&P 500
index fund will
outperform hedge
funds that charge exorbitant fees.
From 2009 to 2012, a
simple, low - fee mix of 60 percent stocks and 40 percent bonds far
outperformed hedge
fund indexes.