Why do passive index funds beat active investors in the U.S., yet the opposite is true for foreign markets? In the U.S. S&P index investing beats the vast majority of actively managed funds. Yet in foreign investing, active management often produces a better return than indexing.
Why is this? Is it because foreign markets are relatively inefficient compared to the U.S., thus opening up mispricing that can be exploited by the active investor? Or are foreign markets in a different stage of their life cycle?
Everyone “knows” S&P indexing is the best approach for U.S. investing, but consider the market life cycle could change …
Interesting article here https://www.cnbc.com/2020/11/24/heres-when-active-mutual-funds-tend-to-outperform-index-funds.html
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