If the markets [or the managers] performed better, a higher proportion of investment gains would go to the investor. As mentioned in this thread, fund managers

If the markets [or the managers] performed better, a higher proportion of investment gains would go to the investor. As mentioned in this thread, fund managers are compensated based on a % of AUM and a % of profit, such as 2% and 20%. When the fund loses money, investors are the only ones that experience a net loss (the managers still net a % of AUM, or nothing at worst). If managers end up not losing money, the investor mathematically keeps a larger proportion of the gains. Also, when you invest in a fund, the idea is you are trusting someone else with your money. This article does not imply managers as shareholders. With this in mind, it does indeed make sense that in times of low performance and frequent losses that the people with no way to lose money end up keeping a greater proportion of earnings. EDIT: This might seem obvious, but its worth mentioning that in times of very good fund performance, the investors will keep an increasingly greater proportion of earnings.