Investor’s Notebook: Active managers failing to live up to performance claims
It has always gone against the grain for me to acknowledge that managers who track indices passively do a better job of growing wealth than their active counterparts. But one has to concede that while there are exceptional active managers, as a group they are failing to live up to their claims of superior performance.Passive investment champions etfSA, headed by MD Mike Brown, rub it in hard. In a note titled "The Extraordinary Outperformance of Index Tracking Exchange Traded Funds" (ETFs), etfSA points triumphantly to ETFs having at the end of March topped the lists of equity fund performers over the past one, three, five, seven and 10 years.EtfSA trumpets: "What has happened to all the active asset managers, with all their fancy technology and marketing propaganda, who promise to outperform the index?"It is a reality that active manager supreme Warren Buffett took to heart. He put it bluntly in a 1999 letter to Berkshire Hathaway shareholders: "Most investors will find the best wa...
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