I think mathematically a fund should seek to minimize a risk exposure of the fund at any given time and maximize the return. We hear about returns metric but I rarely see people talking about risk exposure metric. I would love to see another video on this topic about active vs passive to see if active management at least managed to minimize risk exposure. Risk exposure can be measured for example as maximum fund value drop at any period during measurement. If active funds tend to not have those huge sharp drops vs passive fund then maybe there is still some value in active management.
Great video - what I cant get my head around is how come most active funds are still around - so much work and drama for absolutely no results (apart from charging management fees).
A big reason, in Canada at least, is because financial advisors get higher commissions selling actively managed funds to clients. A lot of people don't even know they're invested in them.
You may get lucky and end up investing in one that does well. And most of them will still perform relatively well even if they underperform an index fund. So it can be sneaky where you don't even realize what you paid in fees since it just comes right out of your account. The only way you'd know is if you did this extensive analysis on what your portfolio's value would be had you invested passively. So if you never look into that then you'll never know
@@investingsucks without the governments’ intervention cant see it happening - way too complicated for an average person (especially if was topping up as and when) - but this will never happen due to lobbying. Also, what is absolutely inpossible, would be to see what on average people doing it themselfes earn (ie watching this channel) vs the market - is it just and enjoyable hobby for 99% with absolutely no practical advantages (esp over the investing career). This is where Im leaning towards - accepting that prob index would beat me over time and all this effort is worthless, just doing it for excitiment really ☺️
Very informative video as always. Here a suggestion for new video: Somehow compare turnover ratio of best(most successful) funds (managers)...or somehow compare if portfolio turnover impacts performance...idk
