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Balanced funds: Not so balanced

Tong Kooi Ong
Tong Kooi Ong8/21/2017 08:00 AM GMT+08  • 4 min read
Balanced funds: Not so balanced
(Aug 21): Actively managed funds have been getting the thumbs down from nearly all quarters.
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(Aug 21): Actively managed funds have been getting the thumbs down from nearly all quarters.

Investors have certainly made their stance known, taking money out of active funds (especially those with comparatively high expense ratios/fees) and piling into passive/index-linked funds, including exchange-traded funds. Globally, ETFs, with their very low fees, have grown exponentially — from US$807 billion in 2007 to US$4 trillion ($5.46 trillion) today.

This week, I’ve decided to take a closer look at the performances of some of the biggest actively managed funds. This is to substantiate claims of their underperformance relative to the market — the reason why investors are flocking to passive investing. The results are quite convincing.

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