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No expense ratio actively managed fund?

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  • No expense ratio actively managed fund?

    Hello all,

    I was rebalancing my 401k recently and noticed 0.00% expense ratio on Fixed Income actively managed fund (bond investments).
    My understanding is that 0% expense ratio means zero fee. I also see some other funds with 0% expense ratio.
    It makes me curious, if we take out the fee (like the one I mentioned) out of the equation, whether actively managed fund performs better than index/passively managed fund.
    Thank you.

  • #2
    Originally posted by usp1stm View Post
    Hello all,

    I was rebalancing my 401k recently and noticed 0.00% expense ratio on Fixed Income actively managed fund (bond investments).
    My understanding is that 0% expense ratio means zero fee. I also see some other funds with 0% expense ratio.
    It makes me curious, if we take out the fee (like the one I mentioned) out of the equation, whether actively managed fund performs better than index/passively managed fund.
    Thank you.
    sometimes, maybe

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    • #3
      I think if you do a little looking , 95% of managed funds dont beat an index fund over an extended period.

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      • #4
        Originally posted by Random1 View Post
        I think if you do a little looking , 95% of managed funds dont beat an index fund over an extended period.
        While it varies year to year it is more like 80% of managed funds underperform their index. Given the unique characteristics and opacity of the bond markets, managed bond funds are less likely to underperform their index than equity managed funds.

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        • #5
          Pic or it didn't happen.

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