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Search for an ETF or holding
Updated 2mo ago.
Updated 2mo ago.
Active management involves a fund manager selecting securities to try to beat a benchmark index. Passive management simply replicates an index (like the S&P 500) without trying to outperform it. The vast majority of active funds underperform their benchmark over the long term.
According to the SPIVA Canada report, approximately 85% of actively managed Canadian equity funds underperformed their benchmark over 10 years.
Active management fees compound silently over the years. Over 25 years, the fee difference between a passive ETF (0.20%) and an active fund (2.00%) can represent tens of thousands of dollars on a $100,000 portfolio. This is why the majority of self-directed investors favour passive index ETFs.