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Tim Armour’s Take On Actively Managed Mutual Funds

Warren Buffett bet $1 million against a group of hedge fund managers, claiming that he can achieve higher returns simply by investing money in an S&P 500 passive index fund as opposed to comparable actively managed funds.

Commenting on Buffett’s wager, Timothy Armour, CEO of Capital Group, says that he may win since there are too many actively managed funds don’t perform well. Only exceptionally well-managed active funds consistently produce above average returns, according to Tim Armour, who explains that mutual funds with low expenses and funds where the managers are willing to invest their personal wealth in the fund consistently perform above average. Armour also urges Americans to find mutual funds with higher than average returns to take charge of their retirement savings.

Tim Armour became chair and CEO of Capital Group in July 2015, accepting responsibility for the investment management organization’s overall business strategies. Armour has been with Capital Group since graduating from Middlebury College with a degree in economics. Starting in The Associates Program, Armour advanced to equity investment analyst and then worked his way up to his current position. Before accepting the CEO position, Armour was already on Capital’s management committee and deputy to the late Chairman Jim Rothenberg.

Only months after becoming CEO, Armour announced that Capital Group would collaborate with Samsung Asset Management in Korea, providing advice on active management and co-developing retirement solutions. Armour was quoted as saying that the “broader plan is to co-design investment solutions to fulfill the savings, retirement and insurance-linked needs of Korean investors.”