Beating passive trackers?

Hoenir

Oldhand_2 said:

Just a comment that I thought might be interesting. Not every thread has to be a question, does it?

Investment trends are cyclical. Global markets have been dominated by a concentrated group of companies over a number of years recently.  Strip these out and the performance of the remaining companies is nothing exceptional. There's a substantial research document by  Hendrik Bessembinder - Wealth Creation in the U.S. Public Stock Markets 1926 to 2019.  Where it's proven that the vast majority of returns came from just 4% of listed companies. Within "markets" there's a lot of crud. 

aroominyork

thunderroad88 said:

dunstonh said:

This is an open invitation, so I compared this fund to Vanguard's Global All Cap Index. It didn't do too badly, but it's more volatile and unfortunately didn't quite manage to outperform VG's fund, lagging by 6.8% over five years, and with higher costs.

5 years is too short a timescale to measure it.

In a cycle where global exc US beats US, then outperforming a global tracker would be easier.   In a cycle when US is best, outperforming a  global tracker would be harder.

Which brings us back to the debate as to whether we might be entering that first cycle…I think we’re potentially closer to it than we’ve been for quite some time. Accordingly I’ve moved some of my passive global tracker money into some actively managed funds to slightly tweak my pf in terms of both factor and geographic exposure to leave me 50/50 US vs ROW. Sure I’ll pay slightly more in fees but I think given the likely volatility in the coming years, I don’t mind paying for some expertise to help reduce that volatility in my pf while still achieving at least average returns. 

If your global approach is passive, why not take a passive approach to ex-US like XMWX?