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why managed funds are a rip off?

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  1. #1

    why managed funds are a rip off?

    I have heard somebody here saying that managed funds are a rip-off. Why?

    I know that fund managers take a percentage of our investment profits, but for newbies like me in investing (but am trying to learn), would managed funds still be a good choice for me?

    If not managed funds (mutual funds), what would be a good alternative for beginner investors then?

  2. #2

    Join Date
    Oct 2006
    Location
    Hong Kong
    Posts
    15,557

    Managed funds per se are not a rip off, but the ones in HK are a complete rip off.

    You need to get a globally diversified passive ETF and be done with it.

    watashihk and shri like this.

  3. #3

    Haha thanks for replying. Actually my question came after reading your "rip off" comment in another thread.

    Could you please elaborate why the ones in HK are a complete rip off?

    I hope to learn.. and be able to tell in the future what cases would be considered a rip off...


  4. #4

    Join Date
    Sep 2019
    Posts
    4,895

    Fees. Sales and management. Potentially also unnecessary churn.

    Learn by reading, many good threads here (and elsewhere).

    watashihk likes this.

  5. #5

    Join Date
    Nov 2019
    Posts
    2,160

    Because a monkey can do it for free


    https://www.forbes.com/sites/rickfer...h=407be0ac630a

    Quote Originally Posted by watashihk:
    I have heard somebody here saying that managed funds are a rip-off. Why?

    I know that fund managers take a percentage of our investment profits, but for newbies like me in investing (but am trying to learn), would managed funds still be a good choice for me?

    If not managed funds (mutual funds), what would be a good alternative for beginner investors then?
    watashihk likes this.

  6. #6

    Fantastic article. Thank you so much!
    Led me to research more into actively managed portfolio vs passive portfolio.


    Quote Originally Posted by ArrynField:
    Because a monkey can do it for free


    https://www.forbes.com/sites/rickfer...h=407be0ac630a

  7. #7

    Join Date
    May 2011
    Posts
    181

    Agreed with getting a few ETFs, automatically invest a portion of your paycheck every month regardless of market conditions (you won’t even miss that spending money after a while), reinvest the dividends, look at it every quarter (or less).

    watashihk likes this.