Question
Fund Performance Consider the following scenario: As a consultant to a pension fund, you are asked whether the fund should continue to hire portfolio managers
Fund Performance
Consider the following scenario:
As a consultant to a pension fund, you are asked whether the fund should continue to hire portfolio managers to manage its portfolios, or simply invest the proceeds in some specified indexes that are consistent with the investment goals of the pension fund. The pension fund's managers point out that they have achieved a return of one percent above the U.S. market. Therefore, they argue that the fund benefits from active management rather than investing in indexes.
Explain why you agree or disagree with the fund managers.
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