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The Alpha Imperative: Why Most Active Funds Fail to Beat Index ETFs
The Alpha Imperative: Why Most Active Funds Fail to Beat Index ETFs
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BTCCSquare news:
Exchange-traded funds tracking capitalization-weighted indices like the S&P 500 have become the bedrock of modern portfolios. Their low costs, liquidity, and diversification consistently outperform active managers—historical data shows 90-95% of discretionary funds fail to beat their benchmarks over 15-year periods.
The persistent underperformance of active management creates a paradox: investors seeking alpha must abandon traditional stock-picking approaches. Outperformance demands systematic, rules-based strategies that exploit structural market inefficiencies rather than subjective judgment.
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