Capitol Group Chairman Defends Actively Traded Funds

Timothy Armour has worked as an equities manager for the 86-year-old Capital Group of mutual funds for 33 years, and is now CEO.

In a recently article published by CNBC, he argues with Warren Buffett that passive index fund investing is not necessarily the best strategy for individual investors to build wealth with. He points out that although many investors have put their money into passive index funds, studies show many of them don’t understand that they are fully exposed to the risk of market crashes.

He also points out that the funds of his own company, Capitol Group, have a total combined life of 653 years. And yet on average they have returned 1.47% more than the relevant benchmark indexes.

He could also point out that success at actively investing for Berkshire Hathaway is what made Warren Buffett the most famous investor in history. He is known for practicing value investing, not index investing and what Armour knows.

Armour graduated from Middlebury College with a degree in Economics. He started out at Capitol Group in their Associate Program. As a novice analyst, he covered international telecommunicati and service companies in the United States. Armour ‘s worked his way up the ladder, and in 2015 he took over as Chairman and Chief Executive Officer. They manage $1.5 trillion.

The Financial Times recently said in an article on Armour that he has decided to challenge the growing popularity of passive index funds. Until recently, the Capitol Group and its American funds were little known. Unlike many other mutual fund families, they did not spend money on advertising and promotion and more information click here.

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