Fund manager

Investierenab 13 J.

A professional who actively picks stocks for a fund. The problem: more than 90% do NOT beat the index in the long run. Yet active funds cost 1.5–2.5% a year. Hence: ETFs.

A fund manager is a professional investor who actively selects securities for an investment fund.

What they do:

• Analyse companies and markets
• Decide which shares are bought and sold
• Try to beat the benchmark index (e.g. MSCI World)

The problem:

Studies consistently show: over 90% of active fund managers do NOT manage to beat their benchmark index in the long run.

• S&P SPIVA study (2024): 92% of US fund managers lagged behind the S&P 500 over 15 years
• In Europe: over 85% underperform over 10 years

Yet active funds cost more:

• Active fund: 1.5–2.5% TER + often a 5% front-end load
• ETF: 0.1–0.3% TER + 0% front-end load
• Over 30 years with €100,000: the cost difference is over €60,000!

Conclusion: for private investors, ETFs are the better choice in almost all cases. The few fund managers who beat the market over the long term cannot be identified in advance.

Did you know? In 2007, Warren Buffett bet $1 million that a simple S&P 500 index fund would beat any hedge fund over 10 years. He won: +125% for the index fund vs. +36% for the hedge funds.

→ ETF-Rechner

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