What Ails U.S. Stock-Fund Managers?
Their relative performance keeps declining.
The Cloud in the Silver Lining
Friday's column gave the silver lining for active U.S. stock fund managers. Over the trailing decade, the gross returns--before paying official fund expenses but after accounting for trading costs--of surviving large-company U.S. stock funds have been competitive with those of index funds. The problem for active funds has not primarily been with their investment decisions, but instead their high management fees and, to a lesser extent, to the taxes their strategies incur.
Unfortunately, if the past 20 years' trend continues, active funds will soon have that silver lining snatched away from them.