Tim Armour, the CEO and Chairman of Capital Group, thinks that Warren Buffett’s advice to invest in passive mutual funds that follow the S&P 500 is setting people up for just average returns. Warren Buffett said that active funds charge too much and trade too often, an argument that Tim Armour has stated is not always the case.
In regards to active funds, Timothy Armour says that many feature low fees and low trading volume. His advice is that when looking for an active fund, find one where the fund manager invests their own money in the fund. This gives them the incentive to outperform the overall market. He also cautions that passive funds don’t provide any protection against down markets. The greatest value of an active fund manager is to spot when the market is going to enter a bear market and protect the assets in the fund against it according to CNBC.
Including his executive roles at Capital Group, Tim Armour has continued to be an equity portfolio manager at this Los Angeles-based firm. He leads one of the oldest investment advisors in the nation. Headquartered in Los Angeles, Tim Armour also oversees the many offices that Capital Group has across the United States and in several other countries.
Tim Armour is a graduate of Middlebury College. After graduating, he entered the financial industry at Capital Group. His ability to manage funds and strong leadership skills led to his current positions at the company. He continues to manage several funds offered by Capital Group.