[jjeaff]

It works exceptionally well based on data. You can pull up almost all of the actively managed mutual funds on something like morning star and compare them to an sp500 or total market index fund. Once you pull the time horizon out to 30 years, you will basically see zero funds that outperform the indexes. Most underperform based on just performance. But all of them underperform once you take the fees into account. So basically every actively managed fund is being run by someone who is faking it.

[zmachinaz]

The selling point is not absolute return, but uncorrelated return. If that is really the case, is a different story ...

[DennisP]

Hedge funds are supposed to be uncorrelated, but I don't think many long-only equity funds make that claim. They just count it a win if they do better than the market (which often happens, but seldom continues).

Then there are the financial advisors. Last time I talked to one, the selling point was nothing but "trust us, we have a team of Ph.Ds."