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.
Warren Buffett built his fortune through active investing, yet tells his family to put 90% in index funds. Why? His 44-year record reveals the answer: from 1981-2002, he achieved statistically significant alpha. But from 2003-2024, his performance became indistinguishable from luck. Academic analysis shows even his early success was systematic factor exposure plus cheap leverage, not stock-picking magic. If Buffett couldn't sustain alpha in mature markets, your fund manager w
Robin Powell
Oct 1814 min read
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