Compare the index option before paying for selection
Look at costs as well as past performance. Finding funds with skill after fees is harder than spotting a past winner.
Compare a broad index fund with an actively managed fund before choosing a long-term holding.
In 2024, 65% of active US large-cap funds lagged the S&P 500 benchmark.
Why consider it?
The figure belongs to the historical annual scorecard for 2024 preserved in the cited archive, not the latest market year or a forecast. It compares active US large-cap equity funds with their benchmark. The book also cites debate over statistical tests of manager skill. Costs matter, but an index fund can lose money; this is not personalized investment advice.
Read the sources
Source grade B is reproduced from the original work. It does not establish suitability for everyone.
- S&P Dow Jones Indices (2025). SPIVA U.S. Scorecard Year-End 2024.
- S&P Dow Jones Indices (2025). SPIVA U.S. Scorecard Year-End 2024. Archived official scorecard page.
- Fama EF, French KR (2010). Luck versus Skill in the Cross-Section of Mutual Fund Returns. The Journal of Finance 65(5):1915-1947.
- Harvey CR, Liu Y (2022). Luck versus Skill in the Cross Section of Mutual Fund Returns: Reexamining the Evidence. The Journal of Finance, 77(3).
Adaptation: Rewritten in English from the locked Chinese original; retained evidence grade and study limits. Effect sizes quoted from the cited source: estimates are kept in their original comparison and population; observational associations are not described as proven personal gains. China-specific statistics, legal rules and procedures omitted.
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