Warren Buffett has made the argument for a long time that people should invest in funds that passively follow the S&P 500 rather than pay more for actively managed funds. His reasoning is that active funds charge too much, trade too frequently, and don’t deliver superior returns.
Tim Armour has responded that he agrees that is the case with many active funds. However, he says that if you can find actively managed funds that have lower fees and avoid trading needlessly. He also says to find a fund with a large part of the manager’s fund in it so that they have a personal interest in providing great returns. He also cautions that Warren Buffet is not looking at the downside of passive funds, which is that when there is a bear market the fund will drop right along with the rest of the market. Armour says that a good fund manager can mitigate losses during these times while still taking part in the upside of increasing markets.
Tim D. Armour is Chairman and Chief Executive Officer of Capital Group, which is a financial services company located in Los Angeles, California. Capital Group, having been found in 1931, is one of the oldest investment advisory firms in the world and has almost $1.4 trillion in assets under management. Tim Armour oversees the company’s global operations which has offices around the world including New York, Washington D.C., Canada, Europe, and Asia.
It was in 2015 that Armour was named as the Chairman of the Board for Capital Group. He was tapped to fill this role when the former Chairman, Jim Rothenberg, unexpectedly passed away. Tim Armour also serves as the Principal Executive Officer of Capital Research and Management, the Chairman of the Capital Group of Companies Management Committee, and as an equity portfolio manager.