An interesting article on the Harvard Business Review blog, by Justin Fox, on a topic that most investors already have a strong feeling (or should I say "bias"?) about. It may not, therefore, change anyone's mind -- but the fascinating lead shows the active-management roots of passive-management legend Jack Bogle:
Writing under a pseudonym in the Financial Analysts Journal in 1960, mutual fund executive Jack Bogle made "The Case for Mutual Fund Management." Bogle took the track records of four leading mutual funds going back to 1930 and compared them to the performance of the Dow Jones Industrials. Not only had the four beaten the Dow, handily, but during the period from 1950 through 1956, for which the brokerage Arthur Wiesenberger & Co. (the Lipper/Morningstar of its day) had calculated mutual fund volatility, all but one of them had fluctuated less than the Dow.
"[M]utual funds in general have met the test of time, and performed in keeping with their stated policies and goals," Bogle concluded.