Why Index Funds May Not Be Your Best Bet Now

By Kayleigh Kulp

The assets you buy and metrics you use, such as dispersion, also play into the equation, says Daniel Lugasi, portfolio manager at VL Capital Management in Orlando, Florida. Dispersion refers to the difference between the best and worst performers in an index. When dispersion is high, active managers that pick stocks tend to outperform, but when dispersion is low, active managers find it harder to choose winners.

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