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How does the active part of the market beat the rest of the active part of the market? Like, I could see the net fees of the active funds being equal to the und
by ThrustVectoring 9y ago
How does the active part of the market beat the rest of the active part of the market? Like, I could see the net fees of the active funds being equal to the underperformance of "dumb money" retail investors mis-picking stocks.
- mrep 9y agoI'm not exactly sure what you are saying. Are you asking how active investors in aggregate can beat index funds despite their fees?
- ThrustVectoring 9y agoSorry. I'm asserting that active investors in aggregate own the exact same stocks in the same proportion as the fund that indexes the stocks they're picking from. So if one active investor outperforms the index, there has to be an active investor on the other side of their trades that has to underperform the index. In other words, since the average active investor sets the average that passive indices track, how do they beat the average?