Being Smart with $$ -- Survivorship Bias Makes the Fund Industry Look Better Than It Is

The attack of Survivorship Bias! Did you know that the performance of existing investment funds as a whole is worse than it may seem on the surface?  That’s because the real stinkers are shut down out of existence and cease to drag down the average of the survivors.  When comparing active fund management against passive index investing, the active managers are boosted by the fact that only the successful ones are still around for comparison.  This generally makes active manager performance as a group look better than it is. 
This is one topic highlighted in my newly updated website: WWW.CLIENTPRIORITY.COM
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Larry Pike, CFA