2007 – another good year to be passive?

The rewards for passively investing have been hard to beat, says Mike Brown.

The overall JSE performance in 2006 was extremely good, for the fourth year in a row, extending the market's winning streak, which started back in the Easter of 2003. For many investors merely seeking to match the performance of the market - known as beta in the investment industry - it is not necessary to look any further than an index tracking fund. Any investor who bought Satrix 40 in early July 2003, at around R7 per share, would have enjoyed close to 40% per annum return since then, allowing for the reinvestment of the quarterly dividends paid by the Satrix securities. The rewards for passively investing in the index have been hard to beat, setting strong challenges for the active investment school, which seeks, but does not always succeed, in beating the index

Read more at MoneyWeb.co.za