/biz/ - Business & Finance

>>1393307
Basically this. Quite a lot of funds have beaten the market and do so quite regularly. The Fidelity Contrafund is a pretty well-known one for example.

What index zealots don't realize (or purposefully ignore) about academia's "research" which they're so eager to cite is the methodology of their "research"--which they draw disingenuous conclusions from. A keyword that academia will use is "consistently," however, they're not using the word in the way most people think of it as, "The vast majority of the time;" academia is using it in the literal sense as, "literally 100% of the time, non-stop, forever." Given that academia has been pushing 'random-walk' theory for a century, I get why they'd stoop so low. Anyway, their "research" is always on a year by year basis, never cumulative over a time period. In other words, if a fund doesn't beat the market every single year in a given period, even if cumulatively by the end of the period the fund has a return 500x higher than the market and only had one year where it underperformed by 0.01%, academia concludes that the aforementioned fund, "did not beat the market."

You can find a ton of funds out there which beat their benchmark on a cumulative basis. Granted, not all of them do or will, but not all of them are trying to either; some funds try to simply reduce volatility or produce better risk-adjusted returns rather than absolute returns.