Active Arguments Disproved
A reader asked me to comment on a recent Forbes article titled “Active Versus Passive Management: Which Is Better?” The author, contributor Peter Andersen, asks this question while observing that, in 2014, the vast majority of active fund managers underperformed the S&P 500 Index.
However, he also notes that there have been periods “where active management of large-cap equity funds stunningly outperformed simple indexing.”
Andersen, who is the chief investment officer at Congress Wealth Management, presents a graph in which he demonstrates “evidence” showing the percentage of active managers who outperformed the passive S&P 500 index investor each year. His graph shows various periods since 1989 when active managers outperform the S&P 500. I thought I’d share my response.
Read the rest of the article on ETF.com.
