Despite the rise of ETFs and index funds, the AP recently reported that investors are still putting money into actively managed foreign stock funds which have attracted $68 billion over the last year. In contrast and over the last 12 months, investors withdrew a net $92 billion from actively managed US stock funds while depositing $156 billion into funds that track the S&P 500 and other US stock indexes.
One possible explanation for the difference is that many investors believe they have more opportunities to capitalize on mispriced stocks in foreign markets than in domestic ones and are willing to pay the higher fund manager fees that actively managed funds come with in order to profit from those markets.
To read the whole article, Investors say ‘bye,’ but not ‘ciao,’ to stock pickers, go to the website of the Associated Press.
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