Problem:
Investment Professionals Don’t Have Access to
Reliable and Profitable Research
April 14, 2023
The vast majority of active fund managers just can’t beat the indexes over 10- or 20-year periods, or in most individual years, either. Consider these tallies for funds that invest in S&P 500 stocks through the end of 2022:
- Over three years, 74.3 percent of actively managed funds trailed the index.
- Over five years, 86.5 percent underperformed.
- Over 10 years, 91.4 percent underperformed.
- Over 20 years, 94.8 percent underperformed.
As the numbers show, the longer you ran the horse race, the more actively managed funds fell.
February 16, 2024
Since 2001, most active managers haven’t made the right calls. A long-running and detailed study of fund performance by S&P Dow Jones Indices shows that active managers haven’t beaten the market:
- 93 percent of the time over 20 years.
- 90 percent of the time over 10 years.
- 73 percent of the time over five years.
- 72 percent of the time over one year.
Even when individual fund managers have beaten the indexes, they have rarely done so repeatedly and consistently. In June 2022, for example, not a single fund had finished in the top quarter of actively managed funds every year for five consecutive years.
Investors spend over $500 billion annually on investment research and advice.
But 90% of advisors fail to beat the market long-term.