Index funds are simple, affordable, and efficient — so why doesn’t everyone stick with them?

Why Not Just Invest in Index Funds? Unpacking the Appeal of Managed Mutual Funds

Index funds are known for their low fees and straightforward approach, but there’s a reason specialized mutual funds still hold their ground. This article explores why some investors prefer the potential for unique growth and tailored strategies offered by specialized funds, despite the allure of simplicity in index investing.

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I remember the first time I heard about index funds. I was at a friend’s dinner party 🍽️, and one guest — a finance buff — was raving about them. “They’ve got such a low expense ratio!”

With fees this low and performance that closely mimics the market, index funds seemed like a dream come true. But as I started researching more about mutual funds, I discovered a question that’s a little more layered:

If index funds are so efficient, why isn’t everyone just sticking to them?