PWL Capital Investor’s Open Letter to Active Fund Managers

PWL Capital Investor’s Open Letter to Active Fund Managers via Ben Felix, PWL Capital

Dear Active Fund Managers: Please do not give up!

We know that 2014 was an especially difficult year for you, and though it was not the first difficult year that you have endured, it was surely the most public. Do not allow yourselves to feel discouraged from headlines like “The Decline and Fall of Fund Managers” and “The Triumph of Index Funds”; maybe your bets and predictions will be more accurate in 2015.

It cannot be easy watching institutions and retail investors aggressively shift their assets from active to passive funds – Morningstar data for a trailing one year period through November 30th showed that active U.S. equity funds lost $91.9 billion, while passive U.S. equity funds received $156.1 billion. At least there were positive flows of $67.6 billion across all active U.S. domiciled fund categories, though passive funds did see inflows of $385.7 billion despite consisting of a significantly smaller fund universe.

Try not to worry too much about Warren Buffett and CalPERS advocating for index funds. Just because they are two of the most well respected and influential figures in the investment world does not mean that they are always right.

Right now it may feel impossible to pick the right stocks or guess the market direction, but do not let your confidence wane! You see, for everyone else to enjoy an efficient market, at least a handful of you need to continue your vigorous research and due diligence on securities. Each one of you may only get it right sometimes, but the aggregation of your predictions plays a role in getting accurate information into prices.

There will always be some investors eager to pay your high fees in hopes of beating the market, regardless of what the data says – you will never be obsolete. So please, ignore the media, the data, and the thought leaders, and keep up the great work!



PWL Capital Investor’s Open Letter to Active Fund Managers


Saved Articles

The Life and Career of Charlie Munger

Charlie is more than just Warren Buffett’s friend and Berkshire Hathaway’s Vice Chairman – Buffett has actually credited him with redefining how he looks at investing. Now you can learn from Charlie firsthand via this incredible ebook and over a dozen other famous investor studies by signing up below:

  • Learn from the best and forever change your investing perspective
  • One incredible tidbit of knowledge after another in the page-turning masterpiece of a book
  • Discover the secrets to Charlie’s success and how to apply it to your investing
Never Miss A Story!
Subscribe to ValueWalk Newsletter. We respect your privacy.

Congrats! Are you a smart person?

We have an exclusive targeted & limited time offer for being a sophisticated and loyal reader.

ValueWalkPremium is a website and newsletter on the latest industry news much of which is not in the public domain and obtained via our sources.

We also have 10 years of resources on how to use this information to better your investment process.

Sign up for  today and get our exclusive content for 40% off. This is our second biggest discount ever!!

Use coupon code VIP20 or click on the button below

Limited time offer only ENDS 4/30/2020 or after the next 40 subscribers take advantage whichever comes first – please do not share this discount with others