The volatile markets have brought the active vs. passive management debate into the limelight again, and the New York Times
just added its pen to the discussion. On Saturday, Mark Hulbert reported
on a new study after Jack Bogle
's heart, released by Windham Capital Management
president and CEO Mark Kritzman
. Kritzman's findings, first published in the February 1 issue of Economics & Portfolio Strategy
newsletter, come down firmly on the side of index funds (pointing to passive management providing better long-term returns net of fees). Kritzman also argues from his findings that hedge funds fare worse than either type of mutual fund.
The active/passive argument also came up earlier this month in the Wall Street Journal
, which highlighted Inalytics
and its CEO, Rick DiMascio
(see MFWire, 2/11/2009
In the Saturday NYTimes, Kritzman tempers his findings by noting that the long-run active/passive discrepancy is lessened within 401(k)s and IRAs, as taxes in his simulation accounted for about two-thirds of the costs of both actively mutual funds and half of hedge funds' costs.
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