Are mutual funds dead because of high fees

Are mutual funds dead because of high fees, or are Bank marketing machines focused on the hot new thing, namely ETFs?

Regardless of what you read online or hear on TV, the final decision is yours.

So, what is the real question here?

In my opinion, investors should ask this question: What are the important considerations when choosing an investment fund, be it a mutual fund or ETF?

First considering mutual funds, is strong and consistent performance is the respective category. Most importantly, the performance should be due to a proven and consistent strategy to active management. Avoid a closet indexer at all costs. If you believe active management, or the pursuit of alpha (outsized market returns), is not your cup of tea, ETFs are your go to.

Checkout my post titles “Top ETFs Everybody Should Own“.

Next, look for a trustworthy company with a solid reputation and respectable capital base. It’s important to make sure there is proven credibility and there is a solid team working behind the scenes supporting the fund manager.

Lastly, take a close look at fees. Indeed, a key takeaway is comparing fees to performance. Is performance worth the fee? Sometimes the answer is obvious, and other times red flags shoot up immediately, that’s a sign to move on.

Conclusion

In the end, investment management fees don’t tell the whole story. Pragmatic investors recognize that fees are part of the game. Obviously, trying to minimize fees is a worthy goal, but don’t let the pursuit limit your potential investment returns.

DISCLAIMER: Content provided in this article is for informational and entertainment purposes only. This article is not legal and/or investment advice. This article should not replace professional investment advice based upon your particular situation. Duties are not assumed, intended or created by this communication.