FYI: Regards(you kind of have to picture me shrieking that line from a mountaintop as a full moon goes blood-red and a man next to me undergoes some sort of animal transformation)
Anyway, in a recent post we examined the causes for the mass-failure of active mutual fund managers to beat their benchmarks over the last few years. It turns out that active managers are not any less skillful than they used to be, it’s just that 2014 was a motherf***er of an environment for them. In order for there to be a surfeit of US domestic equity fund outperformance, at least one (and preferably two) of these three preconditions must be present:
1. Cash is not a drag
2. International stocks doing well
3. Small caps competitive with large caps
Regards,
Ted
http://thereformedbroker.com/2015/04/04/all-three-preconditions-for-active-manager-outperformance-are-present/
