Tim Armour is an authority on managing investments. He suggests that a good investor must always do better than the others in bad times. This is because markets turn. It is important to do better than most during bad times for an investor to grow their savings.
The fact is that the average managed fund has done much worse than the market. But Warren Buffet also talks of exceptions here. But there is no way to know which funds will be able to outperform the others. Hence investors are looking for a way to identify the fund managers that are exceptional.
Here Tim Armour makes use of his extensive research that has been conducted on thousands of mutual funds over many years. He comes out with two simple factors to answer this query. These are low expenses, and the other is high manager ownership. Hence the high-cost funds must be avoided in order to outpace the benchmark indexes consistently.
Hence doing better than the average market over the long term is not a random thing. It requires skill and experience. Hence the history of the 18 equity funds operated by the firm of Tim Armour says it all. Capital Group has 653 years of experience in investment. They have been able to average 1.47 percentage points that were annualized over and above the relevant index benchmarks. These are the figures obtained after all the fund expenses had been calculated. This has been attained in conditions when markets were good and when markets were down.
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