As much as investors and fund managers strive to beat the index, the task is a difficult one and usually unsuccessful.
Around two-thirds of professionally managed large-cap equity mutual funds are outperformed by the Standard and Poor's 500 stock index after expenses, according to Burton Malkiel, Chemical Bank Chairman's Professor of Economics at
For those still hypnotized by the prospect of beating the index,
Funds that beat the S&P 500 shared a value investing style, in which the fund managers buy undervalued stocks, Credit Suisse found. Additionally, their portfolio turnover averaged 30 %, much lower than the industry average of nearly 110 %. The funds had a high concentration of assets, with an average of 37 % of assets in their top-10 holdings. Most were based in Chicago, Salt Lake City, Memphis, Omaha and Baltimore.
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