Report shows fund managers fail to beat index - A recent S&P report has found more evidence to suggest that fund managers who receive handsome fees to pick...

Report shows fund managers fail to beat index - A recent S&P report has found more evidence to suggest that fund managers who receive handsome fees to pick stocks, are failing to beat a simple index. The report found that 69% of active retail Australian equity funds failed to beat the S&P/ASX 200 Accumulation Index over the five years ended June 30, 2012. The result was worse over one year (72.7%) and three years (81.1%). International equities also fared poorly, with 88.3% of funds underperforming the benchmark over one-year, and 72.9% underperforming over five years. A variety of studies have already cast doubt on the benefits of active management in highly efficient markets where competition is high and prices, in theory, immediately reflect all publicly available information. (VIEW LINK)