Do fund managers add value at all?


“So who still believes markets don’t work?
Apparently it is only the North Koreans, the Cubans and the active managers.”

— Rex Sinquefield, co-founder and board member Dimensional Fund Advisors

Obviously what Rex means is that if you believe in equity markets you just need to be in the Index and fund managers do not justify the costs that they charge. This is of course debatable and there is a big army out there in the world who hope to out perform the market index by a mile over a long period of time. However a lot of research shows that it requires nothing short of a magic wand to be able to CONSISTENTLY beat the index.

American research is clear on the fact that fund managers with all their allocation tools, research tools, etc take a toll on your return in terms of charges and the fund out performance vis -a-vis the index is almost non-existent.

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