Where size may be a good thing

Scale can be detrimental to active equity funds, but it can help fixed income and passive investing, says Morningstar Associates' Jeff Bunce.

Jeffrey Bunce, CFA 22 December, 2017 | 6:00PM
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Jeffrey Bunce: In my last video, I spoke about the need to monitor the size of your active equity fund because of the diseconomies of scale that typically result from managing a larger pool of money. The conversation isn't complete, however, without discussing fixed income and passive investing. In the case of the former, it isn't as clear that bigger is worse; and in the case of the latter, scale actually works in the investor's favour.

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About Author

Jeffrey Bunce, CFA

Jeffrey Bunce, CFA  Jeffrey Bunce, CFA, is a senior investment analyst for Morningstar’s Investment Management group.

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