While Mellody Hobson ’91 and John W. Rogers Jr. ’80, the subjects of the article “Facing Down Financial Inequity” (January issue), have clearly led many admirable initiatives, the article overlooks one of the most important facts of financial literacy: Studies have consistently shown that very few actively managed funds can reliably beat the market. Ariel’s own website shows its flagship fund is not one of these outliers, with a 10.67% cumulative return since inception vs. 10.72% for the S&P 500 over the same period.
These returns illustrate a second key fact. For most, the primary result of investing in actively managed funds is enrichment of fund managers/owners, while the humble investor is no better (and often worse) off. Consider instead the advice of one of Princeton’s greatest alumni, Jack Bogle ’51: “Don’t look for the needle in the haystack. Just buy the haystack!” Sharing his visionary investment philosophy, centered not around stock-picking but instead around low-cost index funds, is itself a powerful tool to reduce financial inequity.
While Mellody Hobson ’91 and John W. Rogers Jr. ’80, the subjects of the article “Facing Down Financial Inequity” (January issue), have clearly led many admirable initiatives, the article overlooks one of the most important facts of financial literacy: Studies have consistently shown that very few actively managed funds can reliably beat the market. Ariel’s own website shows its flagship fund is not one of these outliers, with a 10.67% cumulative return since inception vs. 10.72% for the S&P 500 over the same period.
These returns illustrate a second key fact. For most, the primary result of investing in actively managed funds is enrichment of fund managers/owners, while the humble investor is no better (and often worse) off. Consider instead the advice of one of Princeton’s greatest alumni, Jack Bogle ’51: “Don’t look for the needle in the haystack. Just buy the haystack!” Sharing his visionary investment philosophy, centered not around stock-picking but instead around low-cost index funds, is itself a powerful tool to reduce financial inequity.