The Decline and Fall of Fund Managers

Back in August, Charles Ellis wrote an article in the Financial Analysts Journal called ‘The Rise and Fall of Performance Investing’. This was then discussed in the Wall Street Journal (

Basically, Charles Ellis argues that the fees of active managers wipe out the shrinking returns that are available from the equity markets and investors should move away from active fund managers. Charles Ellis says, “What you’re really buying when you turn to an active manager is the incremental return over and above the market return — and what percent of that is the fee? . . . It turns out that fee is at least 50%, often 100%, often 150% of the incremental value delivered.”

The Full Article can read by clicking on this link (rise and fall of performance investing).

As the graphic below shows, there is a whole lot of academic evidence supporting Charles Ellis and even Neil Woodford, formerly of Invesco Perpetual and one of the few successful active managers, admitted that fund managers were charging to much (

Weight-of-Evidence Weight-of-Evidence

Lance Baron

Certified Financial Planner (CFP) based in East Sussex, UK. We support people in Southeast England with more than £500K to invest by building a financial plan that will help them live the life they want… until age 100