Big or small

cwrw

Comparing some broad us index(asLegal & General US Index I Trust Acc) to small caps us funds (as Legg Mason US Smaller Companies X Fund Acc) there doesnt seem to be much benefit to the active funds over the much broader us index trackers. Am I looking in the wrong place?

gadgetmind

Dunno. What are you looking for?

Totton

I often read that active managers find it very difficult to improve on a passive or tracker covering the US. I tried the JPM US Smaller Co's fund but have sold out of that and am relying on global IT's such as RIT to cover the US.

cwrw

gadgetmind wrote: »

Dunno. What are you looking for?

I suppose I'm testing out whether a low costing passive index engine is outperforming mutuals pound for pound (US). Also, I'm interested in knowing if small caps in this area is of any long term benefit compared to large caps. CHEERS.

gadgetmind

Very few large funds beat trackers over a multi-year period and identifying those that do in advance is almost impossible.

There is a lot of evidence for small/mid caps outperforming large caps in most territories, but their higher volatility means that you only really want to "tilt" your portfolio in this direction unless you are very young and very tolerant of large swings in value.

IronWolf

The US works a bit different to the UK. Mutual funds in the US will generally have lower caliber managers and on average will do worse than the index.

The best performing funds in the US are hedge funds, and they are forbidden in law from advertising, and most will take it even further and not allow any investments from regular folks, focusing instead on wealthy clients that have less legal protection. The fee's charged are higher for hedge funds, so attract the most talented managers.