Terry Smith's Fundsmith beat the market for a decade, then trailed four straight years. £3.31bn fled in 2024. Most investors lost money vs a tracker. Why? Timing. They bought high after stellar returns, sold low during underperformance. Jack Bogle's iron law: money arrives after gains, leaves during losses. Even star managers can't beat that.
When Cathie Wood declared index funds "a form of socialism", she joined decades of active managers attacking passive investing on ideological grounds. But proxy voting data reveals something awkward: ARK voted with management 99.2% of the time versus Vanguard's 98.5%. We examine the evidence on index fund governance, ARK's performance record, and why "passive investing destroys capitalism" rhetoric intensifies when active managers underperform.
Robin Powell
Oct 2910 min read
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