Active Fund Managers Beat Michael Jordan, For Once
Was 2022 a single rebound, or the beginning of a dynasty to snap the losing streak against passive index investing?
The game would need to change a lot more to bet against Michael Jordan at the free-throw line.
Photographer: Tom Berg/WireImage/Getty
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2022 was a great year for active fund managers, at least when it came to confronting the passive aggression from the growing ranks of index-following funds. Most of them, according to various Wall Street researchers, actually beat their benchmarks over the 12 months. Even if they didn’t make money, they at least managed to limit losses for their clients, after a decade in which most active managers, year after year, had failed to beat their index. But does that matter? To answer that question, let’s look at the chances of beating Michael Jordan in a free-throw contest. (For non-basketball aficionados: Jordan is widely regarded as the greatest player ever, and a free throw is a little like a penalty in soccer, in which a player stands on the designated spot and makes an uncontested attempt to put the ball through the basket.)