guess they shouldn't be fund managers.
but never forget while active fund managers drop the ball for many reasons including many funds are just to darn small to efficiantly pay to keep the lights on and pay staff.
many of those funds have never and will never do well and most of the funds out there that are listed have little investor money.
i bet if you look at the managed funds investors have the bulk of the money in the claims about active vs index would be very different.
just the top fidelity funds have hundreds of billions in them and they did very well with many beating their indexs easily the last 5 years..
those funds may have more investor money than 75% of the bottom funds all added up.
personally i never think much of the active vs managed statistics just for that reason.
i would tend to think that the odds and outcomes are very different when you follow the money and not the managers.
2014 nothing saw much action except the s&p 500 and large size stocks . you could have been the best stock picker in the world and 2014 didn't matter if it wasn't a big company .
there really is no accurate way to compare since it is our total portfolio that we need to track. a dynamically adjusted portfolio like i have used for 25 years now every so often swaps out a managed fund for a better fund that fits the big picture better.
neither fund may beat their index that year but working together they did.
get the point? there really is only how you did and whether in your own mix could you have done something better than you did?
in my case there are no equals in etf's or index funds that i could have used as then the entire portfolio is different.
personally i think folks get to wrapped up in this managed vs index crap and it really indicates little portfolio wise.
just having a worse tax strategy by retirement can un-do the effects of decades of lower expenses . your buy and sell points far out weight index vs passive returns when the the long term top performing managed funds which have the bulk of investor money is considered.
about the only thing i can compare my portfolio to is what if i just bought an s&p 500 or total market fund instead.
well 25 years later starting with the same 100k i am 450k ahead using my plain ole fidelity funds in an effective portfolio..
but i can't compare against anything else except my own performance since there are no equals to many of those funds.
i always liken it to the statistics of living here in nyc. if we look at our odds of being mugged they can be pretty high since we have lots of bad neighborhoods but the fact is most of us avoid those neighborhoods and so the chances of being mugged are sooooo tiny as to not even be a thought.
in fact we don't even have to know what the best areas are , we just need to avoid the known bad ones and we are way ahead.
my opinion is i think folks need to concentrate more on having the right allocations to fit the bigger picture and the right retirement tax planning strategy in effect early on and put less attention on vanguards brilliant marketing strategy of making it seem indexing and expenses are all that counts.
reminds me of the shrewd guy who pounds the car dealer down to the lowest price ,then goes to work on the finance guy and hammers him. a few years later he is back trading the car in at a wholsale price blowing everything he did on the buy side..
in the mean time grandma paid more for the car, got a higher rate of interest but sold the car more favorably in the end.
grandma wins!
Fidelity beat benchmarks by $35 billion, but does anyone care? | Reuters
