Yesterday's Wall Street Journal reports
Investors in actively managed mutual funds for the past five years have reason to wonder what they have been paying for: A new study from Standard & Poor's finds that 70% of large-cap fund managers who use the S&P 500-stock index as a benchmark for comparison have failed to match the performance of the index over that time....The failure of active management is replicated across almost all categories, not only U.S. stock funds but also bond funds and even emerging-markets funds. What's more, those numbers are similar to the previous five-year cycle.
This phenomenon is a perennial favorite of economics professors. It is discussed in my favorite textbook
in the chapter on "The Basic Tools of Finance."