Let me get this straight and revisit a conversation already had...

Let me get this straight and revisit a conversation already had with another poster on here.

SPIVA data shows that actively managed funds whether it be those that track Australian stocks, US large stocks or other areas of the world fail to beat the benchmark the further the time period is extended.

After 10 years, you are lucky to find 15% of fund managers ahead of their respective benchmark. If you look beyond SPIVA, further than the catalogued 15 year time limit - it gets worse.

Yet, despite all the data being there and talked about incessantly, investors are still amazed and angry when a manager, who previously exceeded the benchmark, has a period of significant underperformance - resulting in all positive performance for the last decade being wiped.

Rather than thinking this was highly likely given the historical data, this is seen as something extraordinary. A cataclysmic event, not based on the fact active managers simply fail in the majority of cases, but down to the managers marital separation, the bets on China or "the rock star" image he adopted.

Nope... nothing extraordinary about it. In fact, if you looked at it from a purely statistical point of view, you would have bet all your money on the fact it was going to happen.

Not trying to sound condescending, just amazed at how the conceivable, and likely event, is treated as a black swan event.

Active fund managers have their time in the sun, and then experience what inevitably happens - they make the wrong bet. They play God and try to predict macro events, outcomes of global pandemics, the amazing opportunities of developing countries headed by a dictator - and they fail.

Whatever the outcome, all active managers face the same fate - reduction in fees, removal of outrageous performance fees (especially those with no or low benchmarks), and a realignment with investors sick of paying a premium for not just market returns, but inferior.

I have no ill will towards Hamish, and wish him well. He is a billionaire fund manager who created an empire that is now suffering. As of today, he made that outrageous wealth selling a product that has now provided less than the cheapest index tracking fund - which could have been purchased by all Magellan investors at a fraction of a percent - with superior results.

Despite all the rhetoric, and falsehoods from active managers - they simply can't compete with the index. You buy a Magellan fund - you have their team working for you. You buy the index - you have every manager in the world working for you.

There will be the usual response, this active manager has outperformed over this period... active managers will come to the fore during a market downturn... despite easily accessible data showing the contrary.

Magellan isn't a victim of Hamish Douglass. It's a victim of the processes it follows. High fees, making big calls on world wide events and places, trying to beat a system that wins 85% of the time.

Magellan just became another number.