Is there any justification for investing in managed mutual funds, or are managed funds for suckers, as indexing advocates argue? We answer this question by looking at a long time span of real fund returns (27 years) for one specific company (Vanguard) that is notable for its low fees on managed funds. By creating synthetic portfolios—portfolios based on the assets of Vanguard’s mutual funds—we find that whether index funds or managed funds are the superior buy depends on the time span in question, but that managed funds almost always have a lower standard deviation of return than index funds.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
Publisher Info
Paper provided by Duke University, Department of Economics in its series Working Papers with number
03-07.
Length: 35 pages Date of creation: 2003 Date of revision: Handle: RePEc:duk:dukeec:03-07
Contact details of provider: Postal: Department of Economics Duke University 213 Social Sciences Building Box 90097 Durham, NC 27708-0097 Phone: (919) 660-1800 Fax: (919) 684-8974 Web page: http://www.econ.duke.edu/
For technical questions regarding this item, or to correct its listing, contact: (Department of Economics Webmaster).
Cited by: (explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)