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Asset Management

Why bond-pickers are beating stock-pickers

Over the past 5 years, the average active large-cap stock fund manager has underperformed the S&P 500 100% of the time

Former Clinton political adviser James Carville, who memorably said that if reincarnated, he would like to "come back as the bond market. You can intimidate everybody".
Former Clinton political adviser James Carville, who memorably said that if reincarnated, he would like to "come back as the bond market. You can intimidate everybody". Photo: Getty Images

The passive revolution has been a boon for investors.

Passive investing, in which the creator of a fund assembles a basket of securities that track an index, is naturally less costly than funds that employ money managers to proactively shuffle the portfolio’s holdings. What’s more, passive funds also provide better returns than actively-managed ones, making them a no-brainer for most investors.

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