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Active Funds

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Blending active and passive into a winning portfolio

  When looking at long-term equity index charts, it’s easy to forget the individual stocks underpinning the indices don’t move as a unified block. This has important implications for how you try to extract returns from markets.

Why an active fund should not perform like its benchmark

Every fund is measured against a benchmark, but active managers earn their fees by taking strong views contrary to an index. It requires fortitude in the short term as interviews with Orbis and Allan Gray show.

Track if your fund manager is taking the best shot

In his final letter as CEO of Amazon, Jeff Bezos implored people to avoid being normal, to nurture their distinctiveness. Fund managers should earn their active fees by building unique, active portfolios.

Why good active managers should outperform

In a continuation of the 'active vs passive' debate, there are many reasons why a good active manager should be worth the extra cost. What should the manager be doing to deliver results?

The numbers tell the story for index investing

The empirical evidence in the active v passive investing debate favours index in most asset classes, but there's a role for mixing the techniques if good managers can be identified - although that's not easy.

Active versus passive – what about risk?

For any investment strategy, it’s important to consider the risks involved. This simple framework, based on fixed interest funds, can help retail investors assess and understand the risks of investing in index funds.

Index versus active – our readers reprise

Last week’s article on index versus active portfolio management drew many comments, including on the website, by email and by forwarding other articles to us. Here is a sample.

Index versus active? Nobel Prize professors can’t agree

If you think you can identify the few managers who can outperform the index over time, either by research or based on advice, go for it. But the odds are stacked against you.

A fortune built on defying the pull of theory

The efficient market hypothesis is 90% true, and you will lose money by ignoring it. However, judging by Warren Buffett’s fortunes, a few skilled searchers might find rewards in the remaining 10% worth chasing.

Most viewed in recent weeks

Vale Graham Hand

It’s with heavy hearts that we announce Firstlinks’ co-founder and former Managing Editor, Graham Hand, has died aged 66. Graham was a legendary figure in the finance industry and here are three tributes to him.

The nuts and bolts of family trusts

There are well over 800,000 family trusts in Australia, controlling more than $3 trillion of assets. Here's a guide on whether a family trust may have a place in your individual investment strategy.

Welcome to Firstlinks Edition 583 with weekend update

Investing guru Howard Marks says he had two epiphanies while visiting Australia recently: the two major asset classes aren’t what you think they are, and one key decision matters above all else when building portfolios.

  • 24 October 2024

Warren Buffett is preparing for a bear market. Should you?

Berkshire Hathaway’s third quarter earnings update reveals Buffett is selling stocks and building record cash reserves. Here’s a look at his track record in calling market tops and whether you should follow his lead and dial down risk.

Preserving wealth through generations is hard

How have so many wealthy families through history managed to squander their fortunes? This looks at the lessons from these families and offers several solutions to making and keeping money over the long-term.

A big win for bank customers against scammers

A recent ruling from The Australian Financial Complaints Authority may herald a new era for financial scams. For the first time, a bank is being forced to reimburse a customer for the amount they were scammed.

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