Mutual Funds with an Active Investing Strategy

Posted on January 5, 2017 By

Timothy Armour of Capital Group gives very good advice to young investors: do not just park your money in a hedge fund and walk away. He recognizes that one problem with this strategy is that most 401k plans encourage passive investing.

Anecdotally, passive investing provides better results; we all remember the age-old financial advice to set up our investments then ignore them so they can grow. However, it has been shown again and again that the actively managed portfolio provides higher yields on a more consistent basis. As the markets grow and change, so must our portfolios.

The unfortunate side effect of constantly buying and selling stocks in your portfolio is that you lose a lot of money in fees. These fees can cost investors hundreds of thousands of dollars in retirement funds over 20 years of investing. Choosing to invest in a professionally managed fund is one way to avoid the largest of those fees by paying a simple percentage of your returns back to the company that manages the fund.

Click here to learn more about Tim Armour.

The Capital Group has a unique method for actively managing investment accounts. Each fund has a specific objective, e.g. Capital Appreciation, Dividend Income, and Capital Preservation, and a group of about eight managers. Each manager has a “sleeve” of investments to manage according to the fund’s objective. The sleeves are combined to make one investment package with a variety of insights and styles built into it. Each manager involved in creating the fund must have his or her own money invested in the fund as well.

Related: Capital Group’s Tim Armour Explains the Load Shop’s Recent Move onto Schwab’s and Fidelity’s No-Transaction Fee Platforms

The Capital Group has conducted research that shows that having an actively managed fund with multiple managers, all of whom invest their own money into the fund, keeps the costs down and provides significant returns. This method is unique in the investing marketplace.

Timothy Armour has worked hard to maintain the high integrity of The Capital Group. He began working with the company when he was a young man in 1983. He has grown with the company and became Chairman in July 2015 when the former Chairman, Jim Rothenberg, passed away. Because he has worked with the group for most of his adult life, Timothy Armour has a unique understanding of the company culture, programs, and goals.

Related: Capital Group Names Armour Chairman to Succeed James Rothenberg

 

Investment Management


  1. Dolan Crest says:

    The resulting package is well-rounded, diversified, and secure. These packages have consistently out-performed the market average, and the fees are usually less than 1% of the cost per share. The actual truth is that essay writing service uk could have used this in advance to cater for everything that went wrong.

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