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 Standard and Poor's 500 stock index after expenses, according to Burton Malkiel, Chemical Bank Chairman's Professor of Economics at Princeton University. The remaining one-third that beat the index tend to underperform the market the subsequent year. For those still hypnotized by the prospect of beating the index, Credit Suisse did a 2003 scouting report with a list of 31 funds whose 10-year returns, from 1992 to 2002, beat the indexes. It also looked at what made the Standard & Poor's 500 as strong as it is. The strength of the S&P 500 could be due to its simplicity and low turnover, according to the report.

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