It is true to a certain degree that active managers have difficulty beating the index. All actuarial firms do analysis of fund returns and they compare different managers versus the index. It's very hard to beat year after year. Pension plans that choose their investment managers look at the data and they interview managers and try to figure out...“Okay, you were good last year, the last four years; what's your secret? Why are you so good?” Many of them are convinced that, yes, I'll trust this manager and I'm confident he'll beat the index in the future. Many of them do; many of them don't. That's what the index is. Half of them are better; half of them are worse.
On March 16th, 2010. See this statement in context.