Abstract
This article revisits the debate on the relative benefits of passive and active management processes, focusing more specifically on the U.S. large capitalization stock equity market, represented by the S&P 500 index. It starts by exploring the pre-tax investment returns that an active money manager would have to produce to equal, after-taxes, the S&P 500 index. It then compares those returns to a universe of active money managers to determine how high the manager would have placed in his peer group. The results indicate that only a very small percentage of active money managers would have produced pre-tax investment returns sufficient to outperform, after-taxes, the S&P 500 index.
- © 1999 Pageant Media Ltd
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