24/7 Wall Street
16 May 2026, 09:13 UTC · 2w ago
Source · https://247wallst.com/investing/2026/05/16/why-90-of-professional-fund-managers-lose-to-the-sp-500-heres-the-one-strategy-that-works/
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The 10-year Treasury yield has risen to 4.46%, significantly raising the hurdle rate for active managers who must now beat both the equity index and a meaningful risk-free alternative. — A higher risk-free rate increases discount rates and pressures equity valuations, while making active fund management and risk asset outperformance considerably more difficult.
-0.60The University of Michigan Consumer Sentiment Index currently sits at 53.3, a level labeled as pessimistic/recessionary. — Recessionary consumer sentiment levels signal potential upcoming weakness in consumer spending and corporate earnings, which negatively impacts risk appetite.
-0.50The VIX experienced extreme volatility, swinging from 13.47 on December 24, 2025 to 31.05 on March 27, 2026, before settling at 17.87. — A VIX spike to 31 indicates a severe spike in market fear and uncertainty during the period, which typically coincides with risk-off asset pricing and forced selling.
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90% of active fund managers underperformed the S&P 500 over the last 15 years. — Sustained active manager underperformance drives structural capital allocation flows away from active funds and into passive index-tracking ETFs like SPY, providing a supportive bid for index constituents.
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Highlighted as a low-cost, effective wealth-building tool with strong historical returns.
Recommended as a reliable option for broad market exposure with strong long-term growth.
Mentioned as a successful long-term call by an analyst, though the context is brief.
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