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Fama: Active Management a Bad Bet

Nobel Prize winner cites lower costs and questions about active manager skill as reasons to stick with index funds.


Active fund management is a zero-sum game in which luck and skill are virtually indistinguishable, says Nobel Prize-winning economist Eugene Fama.

Fama, a University of Chicago finance professor and a co-winner of the Nobel Prize in economics last year for his efficient markets hypothesis, spoke to an audience of financial advisors and institutional investors Thursday at the Morningstar ETF Conference in Chicago.

Adam Zoll does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.