Far from the Madding Crowd: An investment moment in time

An intuitive (but flawed) understanding of passive investing would suggest that, out of 100 active portfolios, an index tracker will come in 50th place. But 2023 showed that's not quite true. According to a mathematical simulation, had 100 investors picked 50 equal-weighted stocks at random from the MSCI World Index at the start of the year, a remarkable 92 of those portfolios would have trailed the Index. In reality, global equity funds did better than just picking stocks at random. Still, the Index managed to beat 73% of active managers—a feat only topped during the build-up to the ...