An index represents the overall performance of all investors (active and passive) operating in a market. On average, investors will achieve performance in line with the index, less trading and other cost/fees. Successful index managers track the index very closely before costs and also charge substantially lower fees than active managers. Therefore, index funds must outperform the average of all active managers, in both bull and bear markets. For a majority of investors, active management is a triumph of hope over experience.
% of managers who underperform the index
