Capital Group’s Timothy Armour believes that Warren Buffet is wrong. Buffet bet one million dollars (for charity) that he’d receive larger returns than hedge fund managers through investing in an S&P 500 passive index fund. Buffet may win, because investors are shortchanged by costly funds.
Tim Armour disagrees with Buffet in that he believes investments aren’t about passive or active funds, but about returns investors receive long-term, and that the idea that passive index returns are safest for retirement must be re-examined.
Even if some actively managed funds have performed poorly—several have done the opposite. Anyone who put $10,000 40 years ago in the S&P index fund would have more than $500,000 today; however, if he put in high-performing funds, he would’ve made even more.
Two hallmarks of excellent hedge fund managers: high manager ownership and low expenses. Look for managers who regularly outdo benchmark indexes on average. With many Baby Boomers retiring—it’s high time that better investment steps are brought to the table.
Tim Armour named Chairman of Capital Group on July 28, 2015, Armour is also Capital Group’s CEO; and chairman/principal executive officer of Capital Research and Management Company, Inc. Graduating from Middlebury College with a degree in economics, he’s had 34 years of experience in this industry.
Armour played a key role in the partnership between Samsung Asset Management and Capital Group, which aims to develop asset allocation products and solutions for retirement. Armour said,
“The broader plan is to co-design investment solutions to fulfill the savings, retirement and insurance-linked needs of Korean investors.”
On the market sell-off in September 2015, Armour said, “We’ve had a six year bull run in the U.S. and rising markets in most other parts of the world.” He foresees China’s transformation into an open economy led by consumers.