
Do active fund managers just sell hope net of fees?
I have been investing for 7-8 years. I understand that’s not a very long time. Every day, I try to improve, read more, and deepen my understanding. Like many of us, I’m a big fan of Warren Buffett, and someday I hope to truly become a value investor.
I see a lot of finance “experts” (ranging from directors to CIOs to CEOs) describing themselves as value investors. Many of these individuals work at large investment firms, have spent years in the industry, and have undoubtedly seen and experienced far more than I have.
For example, I was watching this video this morning: https://youtu.be/PGLrv205VhQ?si=oYX8nGisttUrCPZw (I have nothing against Ariel Investments; this just happened to be the video I watched.)
I then went to their website to see how their funds have actually performed. Net of fees, they don’t seem to consistently beat their comparable index: https://www.arielinvestments.com/performance/
Even when they do outperform, the margin isn’t very large.
I understand there’s a statistic out there that around 80%+ of actively managed funds don’t beat the market. But it makes me curious whether many of these firms are simply promising outsized returns while ultimately delivering market-like returns net of fees.