"If Magellan adheres to their 9% absolute return objective, I...

"If Magellan adheres to their 9% absolute return objective, I for one could not give a hoot what a an index generates. Relative performance means nothing, absolute performance means everything when a person is living off their capital."

You can have whatever shitty ideas you like, but the reality is that for most people (particularly institutional investors) if they're paying fees to a managed fund over 1% and underperforming a cheaper fee index fund that is over a ten year period doubling the return after fees eventually they will come to the conclusion that they're wasting their money.

The nature of compounding is such that over a relatively short period of time that compounded underperformance is going to leave an investor with as an example five million instead of ten million. Those high fees have the same effect, you lose a percent compounded over twenty years and that's a serious amount of money you're down.

Relative performance is *everything*. Relative to inflation, relative to an index fund, relative to rival institutions, relative to your next door neighbour, only an absolute idiot is solely focused an absolute return. The fact is that Magellan has never been so focused on total return either, they only expressly started advertising this heavily in the open as opposed to outperformance in the past 12 months because they could no longer use outperformance as a selling point.

Would you rather 20% a year for 9 years with a tenth year of -10%, or 10% for ten years straight? Truly basic arithmetic you're failing here, and to cap it off you're paying a fee to be a loser.

And guess what? We have absolutely no historical or recent precedent to go off that Magellan would even achieve this 9% absolute return in a crisis and no consequences if they don't, in fact during the height of the 2020 corona crash they were tanking just as hard as anyone else, they collected all the downside and none of the upside because they lost their minds and moved so heavily to cash. If you're living off the capital and can't afford a single down year or two buy an allocation for a few years worth of expenses in bonds, you can't rely on an absolute return OBJECTIVE for which their portfolio isn't even set up to achieve when its so filled with high P/E tech stocks.