We have identified characteristics common to above -
average fund managers, which can contribute additional value to our clients.
It's hard to imagine
the average fund manager crawling through the muck and gathering intelligence in Iraqi Arabic.
So, to come out ahead on a passively managed fund,
the average fund manager doesn't just have to beat his benchmark index — he has to beat it by 1.75 %!
In fact, it is estimated that
the average fund manager (let's say we are lucky enough to find the average) has under - performed the index over this period by around 2 %.
The average fund manager today is the financial equivalent of a professional athlete, with every advantage that a high IQ, elite education, and rigorous training can bestow, and yet despite all these attributes, the SPIVA results are unequivocal.
The empirical evidence that
the average fund manager underperforms and the recent top - performing funds do not outperform subsequently are irrefutable.
There really isn't any secret to it, it's just that they have the mindset and the patience to implement that type of strategy, with is vastly different (and vastly superior) to what
the average fund manager or average investor thinks about investing and portfolio management.