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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
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Weather and investing: how sunshine skews stock returns
Most investors assume prices are moved by information: earnings, interest rates, news. A peer-reviewed study of 37 years of Nasdaq data suggests something stranger. The poor returns of speculative 'lottery-like' stocks are concentrated after sunny weather in the cities where the firms are based — and largely vanish after cloudy spells. The finding says less about forecasts than about how quietly mood reaches our decisions, and why rules-based investing exists.
Robin Powell
Jul 96 min read
The World Cup stock market effect: Is it an actual thing?
The World Cup is a genuine, enormous attention shock — Wikipedia traffic spikes eightfold during the final. Yet a new working paper finds the World Cup stock market effect barely registers in the deep, global markets that carry most of the world's money, and shows how two ordinary ways of measuring it can conjure the effect out of nothing. Where the distraction does bite is among retail investors trading on the noise — the people the original studies never quite looked at.
Robin Powell
Jun 258 min read
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