[moltenguardian]

> Instead, it's that on balance, by far most managers don't beat the S&P 500 on an after-fee basis.

Interestingly, most managers actually do match the S&P500, but before fees. I don't have a link handy, but there have been some academic papers on their performance.

[asdfasgasdgasdg]

The average active manager who mostly uses stocks in the S&P 500 matches the S&P 500, before fees, almost by definition. Given that the vast majority of passive investment is approximately tracking the S&P 500, active managers -- the complement of the passive set -- must also have the same average. The only way active managers could average something substantially different is if passive investments underperformed or overperformed, neither of which are the case.

[bombcar]

Most funds end up so large that they can’t help but to be basically the s&p 500, just with slightly different weightings.

To majorly out perform or underperform you have to be drastically different.

[chii]

> most managers actually do match the S&P500, but before fees.

so what exactly are you paying them their fees for then?

Either way, for an active manager to be worth their fees, they _have_ to beat the index by more than their fees plus a bit more to make up for the risk that they don't. Otherwise, you'd be better off in a passive fund.