Question: What Percentage of Investment Managers Beat The Market In 2014?

Answer:  Not many!  Only 14% of managers who invest in large-capitalization companies beat their benchmarks last year.

From CNN Money:  

A staggering 86% of active large-cap fund managers failed to beat their benchmarks in the last year, according to an S&P Dow Jones Indices scorecard released on Thursday.

Not just a short-term phenomenon either:

Nearly 89% of those fund managers underperformed their benchmarks over the past five years and 82% did the same over the last decade, S&P said.


This article can be a great jumping off point for a discussion about the difference between active (i.e., buying a mutual fund that has a professional money manager running it) and passive investing (i.e., buying an index fund that passively tracks a market index, such as the S&P500) when it comes to performance, fees, strategies and why investors would choose one over the other (See this earlier NGPF post about overconfidence and investors’ belief that they can choose winning investment managers).

Here is NGPF Activity that teaches students about the impact of investment fees over the long-term.