The Situation

The Appealing Story vs the Evidence

Active investing — selecting specific securities or timing market moves to outperform a benchmark — is intellectually compelling. But it faces a structural challenge: for every investor who outperforms, another underperforms. After fees, the average active investor must underperform the index. The data reflects this arithmetic reality consistently across decades.

Active management is a relative game . Before fees, the average active investor matches the index. After fees, the average active investor underperforms it.

— Worthune Decision Framework

• You currently hold or are considering actively managed funds with expense ratios above 0.5%
• You're unsure whether your active holdings have outperformed their benchmark after fees over the past 5–10 years
• You believe you or a fund manager can consistently identify outperformance opportunities