Over short periods (1 year)
- ~30–40% of professional active managers may beat their benchmark in a given year
- Largely due to luck, style cycles, or market conditions
Over medium periods (5 years)
- Only ~10–20% beat the index
- Persistence drops fast — last year’s winners rarely stay winners
Over long periods (10–15+ years)
- ~5–10% of professional traders/managers beat the index
- After fees, taxes, and survivorship bias
- Some studies show <5% over 20 years
Over a full career
- Well under 1% consistently outperform over decades
- Think: Buffett, Renaissance (Medallion), a handful of elite hedge funds
- And many are closed to outside investors or use leverage/structure unavailable to retail traders
