In the long run, the index wins

NEARLY anyone with money in the stock market since 2009 has benefited from the great bull market run. But compared with the overall market, most actively managed stock mutual funds haven't performed very well or very consistently.

Exactly how the funds stack up will depend on the precise measurements you use. If you use the definitions and updated results of a study that I reported on last month, actively managed stock funds as a group look quite weak. In fact, in the six years through March, they did worse than you would have expected if their managers had flipped coins instead of picking stocks.

That study, "Does Past Performance Matter? The Persistence Scorecard", by S&P Dow Jones Indices, asked whether good performance in one year persisted in the years that followed. It generally didn't. Not a single actively managed fund finished in the top quarter in each of the six years through March.