To be clear this is not a guaranteed money-making strategy. If the fund underperforms, your core holdings may underperform just as badly or worse. Not paying a management fee will help mitigate that over the long term.
That is why it’s important to understand why you have chosen to track the fund in the first place. And remember that a fund’s performance should be measured over as long a term as possible.
This is for investors who want to be a little hands-on with their portfolio or are interested in a specific niche but know that they can’t put in the hours necessary to properly build a high-quality portfolio. This isn’t for those who want to do it all themselves and pick stocks independently. And this certainly isn’t for those who want to passively invest.
Regardless of who you are, just going through this article should at the very least have opened your eyes to the unique advantages you have as a small retail investor over large institutional funds. And you’ve also seen the ways management fees and portfolio diversification affect you as an investor.
Of course, it goes without saying that I am not an investment advisor and none of this is investment advice. You should always do your own research before making any investment decisions!