Low Fee Mutual Funds

Many people had put forward that investors who invest in mutual funds should seek out those that are low cost so that they are not unnecessarily paying for the services of poor performing fund managers. With such an argument, these same people are touting that investing into index funds will be one of the best option available since they are typically low cost.

Is such an investment style justified? After reviewing through the various options, I see that there is no point to deny competent fund managers an equitable renumeration if they are able to deliver value to my investments.

The aim of investing via mutual funds is that risks are diversified and the services of professionals are engaged to manage the funds. Many people expressed dissatisfaction with management fees charged because the funds had not performed up to expectations. This is a justified complaint since no one is willing to be shortchanged when they are paying good money in anticipation of proper returns.

But the truth is that there are mutual funds out there that are very consistently delivering above average returns. Investors just have to do their homework to sieve out these investment gems and invest into them. What harm is there to pay a portion of the returns obtained as renumeration when these returns are not achievable on our own when we have no time to monitor and diversify investments?