This article in the WSJ (behind paywall), shows that only 9.3% of actively managed mutual funds beat the S&P 500 index by the end of September. That is well below the previous low in 1995 of 12.9% that failed to beat the S&P 500 index. While some funds do beat the S&P index in any given year, most of them fail to consistently beat the index in subsequent years. It would appear that investors who continue to pour money into actively managed funds are not as rational as we assume. They prefer to pay high fees in anticipation of hitting the jackpot. They are much like those who purchase lottery tickets in the hope they can defy the laws of laws of probability which work against them.