top of page
BLOG
News, views and analysis
The Evidence-Based Investor a proud partner with
FEATURED POST
Why active funds underperform even when the manager picks well
The managers running the biggest active funds picked stocks that beat the market in 2025 — and most still lagged their benchmark. A Morningstar do-nothing experiment and a body of academic research explain why active funds underperform even when the picking is good: skilled buying undone by poor selling, the hidden cost of trading, and the incentives that keep managers churning. The UK evidence points the same way.
Robin Powell
Search
Fundsmith's underperformance, at 21 times the cost
Terry Smith built Fundsmith on a simple discipline: buy good companies and do nothing. Now, five years into trailing the market, he is turning over half his portfolio and paying more attention to momentum. The strategy that made his name is changing. The fee that came with it is not.
Robin Powell
9 hours ago3 min read
Is Terry Smith right to blame index funds for his struggles?
Terry Smith blames index funds for Fundsmith's five-year slump — but international market data, factor analysis, and 2024's high-dispersion conditions tell a different story. Here's what the evidence actually shows.
Robin Powell
Jan 156 min read
The Terry Smith timing trap: why most investors lost money
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.
Robin Powell
Nov 3, 20256 min read
Is Terry Smith genuinely skilled or did he just get lucky?
Terry Smith's Fundsmith Equity fund has underperformed for four years, losing billions in outflows. But is this evidence of declining skill or simply bad luck? Academic research reveals it takes 36-800 years of data to statistically prove a fund manager has genuine talent rather than benefiting from chance. Smith's 14-year track record, despite early success, is statistically meaningless. His recent struggles with NVIDIA, Apple and Novo Nordisk may look like stock-picking err
TEBI
Jul 8, 20257 min read
SUBSCRIBE
Simply provide your email address to receive our regular update.
bottom of page