Passive vs active
Even if you were skilful or lucky enough to identify a “ star ” in advance , you still would have been better off in an index fund once your costs were factored in
The battle has been won I mentioned before that the time has come to step back from writing about this subject . Why ? To be honest , it ’ s partly because I ’ ve grown bored with it . But the main reason is the argument has already been won . Anyone who has looked at the evidence with a genuinely open mind will know there isn ’ t a “ debate ” at all . Passive is the runaway winner .
If people don ’ t accept that , it ’ s because they don ’ t want to – usually because it presents an existential threat to their business model . Will actively managed funds ever be worth investing in ? Possibly . But only if they substantially reduce their fees . Will that happen ? Don ’ t hold your breath . Managing other people ’ s money is an awesomely lucrative business . I can ’ t see fund managers giving that up any time soon .
Issue 87 - September 2022 / 15 /