Morgan Stanley: It's Tough to Beat the S&P 500, and This Is Why
Don't feel too bad, active managers. It's not your fault
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It's no secret that active managers have struggled to outperform in the past five years while the S&P 500 and other benchmark indexes have seen big gains.
According to a Bloomberg report earlier this year citing Morningstar data, just 20 percent of mutual funds that pick U.S. stocks beat their main benchmarks in 2014, while 21 percent topped the indexes in the five years ended Dec. 31. (If you widen the time frame to 10 and 15 years, the winners rise to 34 percent and 58 percent, respectively). Unsurprisingly, investors have thus moved money to low-cost funds that mimic indexes.