{"about":{"site":"https://codewithpapers.app","non_affiliation":"Code with Papers and Syntology are not affiliated with, endorsed by, or sponsored by Papers with Code, Meta, or the pwc-archive mirror.","licence":"CC BY-SA 4.0","licence_url":"https://creativecommons.org/licenses/by-sa/4.0/legalcode","attribution":"https://codewithpapers.app/attribution","modified":"archive material modified by Syntology; see the attribution page"},"url":"/paper/the-impact-of-big-winners-on-passive-and","title":"The impact of big winners on passive and active equity investment strategies","arxiv_id":"2210.09302","date":"2022-10-17","proceeding":null,"authors":["Maxime Markov","Vladimir Markov"],"abstract":"We investigate the impact of big winner stocks on the performance of active and passive investment strategies using a combination of numerical and analytical techniques. Our analysis is based on historical stock price data from 2006 to 2021 for a large variety of global indexes. We show that the log-normal distribution provides a reasonable fit for total returns for the majority of world stock indexes but highlight the limitations of this model. Using an analytical expression for a finite sum of log-normal random variables, we show that the typical return of a concentrated portfolio is less than that of an equally weighted index. This finding indicates that active managers face a significant risk of underperforming due to the potential for missing out on the substantial returns generated by big winner stocks. Our results suggest that passive investing strategies, that do not involve the selection of individual stocks, are likely to be more effective in achieving long-term financial goals.","url_abs":"https://arxiv.org/abs/2210.09302v5","url_pdf":"https://arxiv.org/pdf/2210.09302v5.pdf","source":{"archive":"pwc-archive (Hugging Face), CC BY-SA 4.0","snapshot":"2025-07-28","licence_url":"https://creativecommons.org/licenses/by-sa/4.0/legalcode","row_kind":"abstracts"},"code_links":[{"paper_slug":"the-impact-of-big-winners-on-passive-and","repo_url":"https://github.com/maxmarkov/stock-index","is_official":1,"mentioned_in_paper":1,"mentioned_in_github":1,"framework":"none","reach":null}],"tasks":[],"methods":[],"datasets_introduced":[],"methods_introduced":[],"results":[],"syntology":{"syntology_url":null,"atlas_url":null,"mcp":null,"developers":"https://syntology.ai/developers"},"arxiv_metadata":null,"syntology_extracted_results":null}