Its been reported via the FT that since January, 45% of UK based Active Fund Managers failed to beat the SP UK BMI Benchmark. Further research over a 10 year period show more than 66% failed to beat the benchmark.
The traditional USP of active management is that despite higher fees they offer index busting returns, this poses quite a quandary. Investors will always vote with their feet or in this case capital and head off to greener pastures of index trackers.
Its been quite a year for active managers especially in regards to assessment of value and whether their funds are fair and well priced. News on this may lead to more sleepless nights.
It is however worth questioning whether its realistic or even possible for all AM’S to beat the market, that just doesn’t make sense in regards to things like price discovery and market competitiveness.
Lets flip the sensationalist first line, 55% of active managers actually beat the market, to me this seems a success given the year we’ve had! Question everything!
