Indexed strategy beats most actively managed strategies
Investors can choose between active management and indexing.
An index fund seeks to mirror the performance of the stock market by investing directly in the shares that make up the market. The alternative strategy is to trade the market in the hope of earning an above-market return. This is called active management.
Only 20% of actively-managed equity funds have outperformed the SA index over the past 20 years.
Active managers have a dismal track record in South Africa and the US
As past performance is not an accurate predictor of future performance, the probability of identifying these out performers ahead of time is equally low. Not dissimilar from playing Russian roulette – not with one chamber loaded, but with one chamber empty!
Learn more about the 10X index strategy.