I am somewhat surprised that close to 90% of active fund managers under-performed the S&P 500 in 2014 (hedge funds also had a poor year). I am saying this because we had within the US stock market widely diverging performances of different sectors, which – at least in theory - would have allowed an active manager to overweight strong sectors while at the same time under-weighting weak sectors.
Maybe the US stock market was not as strong as the indices suggest. Possibly, fund managers do not have sufficient time for deep reflection or it could be that, as Clare Boothe Luce opined, “What generally passes for ‘thought’ among the majority of mankind is the time one takes out to rearrange one's prejudices.”
