In a recent article published in the Eureka Report, financial education consultant Scott Francis takes a look at the phenonemon of "index hugging" that seems to be employed by the large managed funds.
In particular Scott looks at the top 10 holdings of each of these funds along with their daily percentage proce movements over the month of July. Both suggest that the funds chosen provide a very similar result as that provided by the index. Unfortunately this index hugging approach comes at the cost of active fund manager fees meaning the investor is paying too much for what they are getting.
To take a look at the full article please click on the following link - Active funds' dark secret