Every portfolio is different—and so are the people who manage active and passive funds. In this episode, we dig into the details of how fund managers at two different firms approach their role. Their decision-making processes vary according to the goals of the fund and their strategy for achieving those goals.
First, Mark speaks with David Giroux, chief investment officer for equity and multi-asset at T. Rowe Price Investment Management. He and Mark discuss the guardrails that are in place to prevent some decision-making biases, what the buy-versus-sell decision actually looks like, exploiting market inefficiencies, and many other topics.
Next, Mark is joined by Chuck Craig, senior portfolio manager for Schwab Asset Management. Chuck is responsible for oversight and day-to-day management of international equity index Schwab Funds and Schwab ETFs. He holds a master of science degree in financial markets and trading and is a CFA® charterholder. As a manager of a passive index fund, Chuck’s perspective on the buy-versus-sell decision is much different. He and Mark discuss how tracking an index works, how to balance risk, and the importance of securing tax efficiencies within the fund.
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Important Disclosures
Investors should consider carefully information contained in the prospectus or, if available, the summary prospectus, including investment objectives, risks, charges, and expenses. Please read it carefully before investing.
The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. The investment strategies mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision.
All expressions of opinion are subject to change without notice in reaction to shifting market conditions. Data contained herein from third-party providers is obtained from what are considered reliable sources. However, its accuracy, completeness, or reliability cannot be guaranteed. Supporting documentation for any claims or statistical information is available upon request.
Experiences expressed are no guarantee of future performance or success and may not be representative of you or your experience.
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Examples provided are for illustrative purposes only and not intended to be reflective of results you can expect to achieve.
Past performance is no guarantee of future results and the opinions presented cannot be viewed as an indicator of future performance.
Diversification, asset allocation, and rebalancing strategies do not ensure a profit and do not protect against losses in declining markets. Rebalancing may cause investors to incur transaction costs and, when a nonretirement account is rebalanced, taxable events may be created that may affect your tax liability.
Indexes are unmanaged, do not incur management fees, costs and expenses and cannot be invested in directly. For more information on indexes please see www.schwab.com/indexdefinitions.
This information does not constitute and is not intended to be a substitute for specific individualized tax, legal, or investment planning advice. Where specific advice is necessary or appropriate, Schwab recommends consultation with a qualified tax advisor, CPA, financial planner, or investment manager.
Investing involves risk, including loss of principal.
Environmental, social and governance (ESG) strategies implemented by mutual funds, exchange-traded funds (ETFs), and separately managed accounts are currently subject to inconsistent industry definitions and standards for the measurement and evaluation of ESG factors; therefore, such factors may differ significantly across strategies. As a result, it may be difficult to compare ESG investment products. Further, some issuers may present their investment products as employing an ESG strategy, but may overstate or inconsistently apply ESG factors. An investment product’s ESG strategy may significantly influence its performance. Because securities may be included or excluded based on ESG factors rather than other investment methodologies, the product’s performance may differ (either higher or lower) from t…
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