I am 40 and currently I am investing in the following funds.

T Rowe Price (Actively Managed Funds) (Traditional IRA contribution POST TAX):

Communications & Technology Fund - I Class TTMIX

New Horizons Fund - I Class PRJIX

Science & Technology Fund - I Class TSNIX

Health Sciences Fund PRHSX

Total return since inception: 13.97% Average expense ratio is around 0.6%

Vanguard (Index Funds) (Non-Retirement Mutual Funds Account):


Expense ratio is around 0.04%

My question is that should I keep investing in actively managed funds or should I stop my investing and only invest in index funds OR should I just leave it as it is to give more diversity to the funds.


Should I rollover all the balance from actively managed funds to index funds?

1 Answer 1


If I were you with those options, I would only invest in the Vanguard Index Funds as they are passively managed and offers lower expense ratio. Passively managed funds (e.g., VTSAX VIGAX) usually perform better than actively managed funds in the long run. Even if you're diversified with active managed funds across different sectors, you'll still be paying higher expense ratios in the long run. You can get a diversified portfolio with VTSAX and VIGAX.

  • Thanks! I have quite a bit of money in Traditional IRA (Actively Managed Fund) $300K. Should I rollover that money into Vanguard Mutual Funds (VTSAX, VIGAX) (Non-Retirement Account) or should I just leave it there and do all future investments into Vanguard Funds.
    – Mary Doe
    Sep 11 at 2:06
  • 3
    @MaryDoe "rollover" is a specific term which normally means to move from one qualified plan or IRA to another, which preserves your tax deferral (in your case only on gains to date, because you say your contributions were post-tax). If you move from an IRA to a nonretirement account, no matter whether it invests in active funds, index funds, junk bonds, gold coins, or speckled ducks' eggs, you owe income tax, and since you are under 59.5 an additional 10% tax unless certain exceptions apply. ... Sep 11 at 4:36
  • 2
    ... Most IRA custodians will let you invest in Vanguard index (and other) funds, and if yours doesn't you can roll that IRA to an IRA at Vanguard which absolutely does, or any of hundreds of other custodians which also do, but the key point is to remain in an IRA. Sep 11 at 4:38

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