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# Paying More for Managed Funds? Why High Fees Don't Get You Results
- URL: https://www.baldmoney.com/paying-more-not-guaranteed-to-get-better-results/
- Published: 2025-01-28T10:35:38.000Z
- Updated: 2026-06-13T07:19:00.000Z
- Description: I'm told that paying more gets you a better product. But when it comes to managed funds vs index funds in Australia, high fees usually buy you underperformance.
- Author: Baron Barnet
- Tags: Index funds, Investing, investment funds

I've been brainwashed to believe "you get what you pay for." But in the world of personal finance, that's a flat-out lie.

Just because an investment fund is expensive doesn't mean it's better. A higher price tag is often just marketing designed to make you feel safe—like Stella Artois bragged about being "reassuringly expensive." But when you look at **active vs passive investing Australia**, paying premium fees usually gets you sub-par performance.

Here are a few classic examples where paying more doesn't guarantee a better result:

1. **Expensive wine:** Most people actually prefer cheaper plonk in blind tastings (see this [Freakonomics radio show on wine comparisons](http://freakonomics.com/2010/12/16/freakonomics-radio-do-more-expensive-wines-taste-better/?ref=baldmoney.com)).
2. **Designer handbags:** Does a $1,200 Burberry handbag hold your phone any better than a sturdy Aldi shopper?
3. **Private school fees:** The academic boost is often negligible once you adjust for family background.
4. **Managed funds vs index funds:** Active fund managers charge massive fees claiming they can beat the market. However, the [SPIVA Australia Scorecard](https://www.betashares.com.au/advisers/are-active-funds-really-a-better-bet-in-the-current-market-environment/?ref=baldmoney.com#:~:text=The%20SPIVA%20%28S%26P%20Index%20vs,of%20active%20managers%20have%20underperformed.) consistently proves that cheap, passive **index funds Australia** outperform the vast majority of active managers over the long term.

Before you hand over your hard-earned cash to a slick fund manager, remember: in investing, you actually get to keep what you *don't* pay for.