There are several disadvantages of passive investment, including:
1. Limited investment options: Passive investing is often limited to index funds and ETFs that track a specific market index.1
2. Preset limits: Passive funds lock into a predetermined set of investments with little variation between funds.
3.2 Greater risk: Passive investing involves more risk compared to active investing, as it is more vulnerable to market fluctuations.
4. Limited flexibility: Passive funds are less flexible than actively managed funds, as they are constrained by the underlying index they track.
5. Ultra-low fees: While passive investing offers lower fees, it still charges a management expense ratio, which can vary depending on the fund.
11/6/2023 01:47am
