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> Instead, it's that on balance, by far most managers don't beat the S&P 500 on an after-fee basis. Interestingly, most managers actually do match the S&P500,
by moltenguardian 6y ago
> Instead, it's that on balance, by far most managers don't beat the S&P 500 on an after-fee basis.
Interestingly, most managers actually do match the S&P500, but before fees. I don't have a link handy, but there have been some academic papers on their performance.
- asdfasgasdgasdg 6y agoThe average active manager who mostly uses stocks in the S&P 500 matches the S&P 500, before fees, almost by definition. Given that the vast majority of passive investment is approximately tracking the S&P 500, active managers -- the complement of the passive set -- must also have the same average. The only way active managers could average something substantially different is if passive investments underperformed or overperformed, neither of which are the case.
- deleted 6y ago[deleted]
- bombcar 6y agoMost funds end up so large that they can’t help but to be basically the s&p 500, just with slightly different weightings. To majorly out perform or underperform you have to be drastically different.
- chii 6y ago> most managers actually do match the S&P500, but before fees. so what exactly are you paying them their fees for then? Either way, for an active manager to be worth their fees, they _have_ to beat the index by more than their fees plus a bit more to make up for the risk that they don't. Otherwise, you'd be better off in a passive fund.