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The Mutual Fund Is Very Much Alive and Well
Aug 31, 2023
Discover the continued relevance of mutual funds and their value in defined benefit plans and 401ks. Learn about the Baron Partners Fund, which outperformed by focusing on Tesla. Explore potential exposure to the space sector through mutual funds and Fidelity's performance. Discuss the success of Fidelity in low cost index funds and the importance of fees for active mutual funds. The speakers express gratitude and recommend VTI for investing in the entire market.
26:29
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Quick takeaways
- Concentrated bets and taking on more risk can allow mutual funds to outperform broad market indices, as seen with the Baron Partners Fund's success in outperforming the QQQ ETF through a large allocation to Tesla.
- Fidelity's active equity managers have outperformed their benchmarks, particularly in growth stocks, by capitalizing on opportunities and leveraging their in-house analyst training program.
Deep dives
Mutual fund manager outperforms QQQ with concentrated bets
One mutual fund manager, the Baron Partners Fund, has managed to outperform the QQQQ, an ETF that tracks the NASDAQ 100 index, through concentrated bets and taking on more risk. The Baron Partners Fund, managed by Ron and Michael Barron, has achieved an annualized return of 17.8% over 15 years, with a large allocation of about 40.5% to Tesla. This level of concentration is unusual for mutual funds, but it has paid off for the Baron Partners Fund. While most active managers struggle to beat broad market indices, this fund has found success through its unique approach.
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Discover
highlights
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