Hen Solo
12-29 13:06

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@Barcode：$S&P 500(.SPX)$ 📊📉🔥 73% of Active Funds Crushed by Structure in 2025, Not Skill 🔥📉📊 📉 73% of large-cap active mutual funds underperformed $SPX in 2025, and I’m reading this as a structural verdict, not an indictment of talent. I’m operating in a regime where liquidity concentration, momentum amplification, factor crowding, and systematic inflows dominate price discovery. When capital is channelled mechanically into index replication, beta becomes the primary return driver and dispersion collapses. In that environment, discretion struggles, regardless of experience. This is why positioning has shifted away from isolated stock selection toward factor exposure, flow alignment, and benchmark gravity. When inflows target index weightings, price signals reflect aggregate demand rather than intrinsic valuation. Fees erode marginal edges, turnover compounds execution costs, and career risk forces managers into benchmark proximity. The index quietly wins. 📊 Historical precedent confirms this pattern I’ve seen this cycle repeat across decades: • 1997–2000: Narrow tech leadership drove ~82% of large-cap funds to lag as concentration intensified. • 2013–2017: QE sustained beta-driven gains, with ~65% annual underperformance on average. • 2020–2021: Fiscal stimulus fuelled momentum regimes, pushing ~70% of funds behind the index. • 2025: Once again, ~73% underperformance as passive dominance accelerates. Long-run data reinforces the challenge. Since 2007, the long-term median rate of outperformance sits closer to the high-30% range, meaning 2025 is materially below trend. Survivorship effects further distort reality, with a large portion of domestic equity funds merged or liquidated over the past two decades. Over full market cycles, sustained majority outperformance remains the exception, not the rule. 📈 Why $SPX continues to dominate I’m watching mega-cap concentration, automated rebalancing, volatility suppression, and relentless passive inflows. A small cohort of mega-caps now represents a historically elevated share of index market capitalisation, amplifying tracking risk for any manager who deviates. Underweight the leaders and relative performance bleeds. Chase them late and drawdown risk explodes. Either way, structure favours the index. Capital flows confirm the shift. Active equity mutual funds have faced persistent net redemptions, while passive equity ETFs continue to absorb hundreds of billions in inflows. Investors are voting with capital, recognising embedded costs without commensurate alpha in low-dispersion regimes. This does not mean alpha is dead. It means alpha has migrated. In low-volatility, high-correlation environments, beta captures the return stream. When volatility expands, correlations fracture, and liquidity tightens, dispersion returns and skill reasserts itself. Regime matters more than ideology. 🔍 What I’m monitoring next I’m focused on volatility regime shifts, breadth thrusts, factor reversals, earnings dispersion, and macro inflection points. Sustained VIX expansion, weakening advance-decline metrics, value-growth rotations, or policy pivots would fracture leadership quickly and reopen the opportunity set. Until then, the evidence is clear. Market structure is overpowering stock selection. 📢 Don’t miss out! Like, Repost and Follow me for exclusive setups, cutting-edge trends, and insights that move markets 🚀📈 I’m obsessed with hunting down the next big movers and sharing strategies that crush it. Let’s outsmart the market and stack those gains together! 🍀 Trade like a boss! Happy trading ahead, Cheers, BC 📈🚀🍀🍀🍀 @Tiger_comments @TigerPicks @TigerObserver @TigerStars @TigerWire @Daily_Discussion
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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