Thank you for the answer. I agree. Those who are beating the market are billionaire. There are few well know investors in the world.

Institutionals could beat on average the market, if they have appropriate information. I worked on a model showing that institutionals will beat retail Customers if they can implement recommandations they give to Customer with some hindsight (ie one or two weeks before).

Using a unique data set containing all short-selling transactions at the investor level on the Brazilian stock market, we find that 16% of all institutions are winners on average. 

This fraction should be lower if we include institutions that do not sell short, so take this as an upper bound.

There is no such thing as Institutional Investors that beat the market every time. In fact, after deducting all fees including commission and management fees, most institutional investors under perform the market. This has been proved empirically in the finance literature.  

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not every-rime they cannot beat market but sometimes they can with volumes. 

Dear Prof. Thonse Hawaldar,

                                                        In terms of the discussion on this String, If markets are efficient in the weak sense but not in the strong form or semi-strong form, they can. Market Efficiency according to the CAPM is an observational characteristic at equilibrium. If you care to you can take a look at one of our Quantitative Finance papers on Incomplete Markets and Pareto Efficency and our joint paper on Insurance  Markets on www.researchgate.net/Soumitra K Mallick.

Soumitra K. Mallick

for Soumitra K. Mallick, Nick Hamburger, Sandipan Mallick

Yes, institutions can beat the market not every time, but many times, if the market is weak form efficient. This is because they may have access to information which all the investors in the market may not have & have the technical expertise & tools to understand the information. Also, they trade in volumes & may succeed in swinging the market & benefitting from it.  

 Dear professor 

I will say that no one can beat the market as collective price discovery is always better than individual fund manager however sometime these fund manager take advantage mispricing in market. Some time the insider information (better information source) than market help them to beat market. 

In my little work on efficiency of market I have on one conclusion that it is the investor who can be efficient or inefficient but market us always efficient. Whose efficiency ratio is better than their inefficiency , they are billionaire. 

If mutual fund manager could beat the market then their return should be more then double of their benchmark index.

Regards

Well, you have already much material here. 

As former institutional investor, my answer is "clearly no" but the goal of many investors is not to beat the market but to 1) precisely manage the overall risks (exposures and so no) and 2) properly manage the constraints of the funds (so that you are confident the fund you are invested in respects the initial guidelines)

Regards

Emmanuel

 If the institutional investors could beat the market everytime, there would be no incentive for the managers to manage someone else's money!

It is not possible sir. Because, various macro environmental involved in this.

I have invested some of my funds in the market directly, and some through institutional investors. Over the last two years, my own portfolio has out performed that under my Institutional investor. Their fees & charges are steep, but performance average. So its just a matter of chance. We rely on Institutional investors, since we can't monitor our portfolio regularly due to our other engagements.

Not possible every time or consistently. Most of the time they outperform the market due to the huge investment size, inside information and better prediction ( because of data base and tools). But when they deduct their commission and other charges, inventors will get returns similar to or less than market return.

If possible better to invest directly rather than depending on institutional investors. Moreover, the regulations and regulators made stock market more transparent. .

It may not be possible for institutional investors to outperform the market all the time. They operate as speculators seeking to  maximize gain and minimize risk. They know better than the market because of their ability to forecast the market trend based on available information. Thus, they oftentimes outperform the market, but sometimes they fail to do so due to unanticipated random effects. 

This is not possible all the times even if they have privileged information. Sometimes they can outperform the market. However, this is not possible at all times, because the market has many unanticipated and random events. This makes it impossible to overtake the market always.

It is not possible because stock market is well establised and have a wonderful team and employees to manage stocks . More importantly , environmental factors does matter a lot.

Dear Iqbal Thonse Hawaldar

Investments of large institutions may occasionally impact the stock market. This is if several institutions of a country are united and with a moderate risk of investment and pretending in common to "maximize the profit", they could impact (to affect) the stock market of a country, but hardly to move the International Markets; with the possible exception of world economic leaders such as the United States and the European Union.

regards

Jose Luis

Estimado Iqbal Thonse Hawaldar

Las inversiones de grandes instituciones en alguna ocasión pueden impactar al mercado de valores. Esto es si se unen varias instituciones de un país y con un riesgo moderado de inversión y pretendiendo en común "maximizar la ganancia", pudieran impactar (afectar) a la bolsa de valores de un país, pero difícilmente mover los Mercados Internacionales; a excepción probablemente de los líderes de la economía mundial como Estados Unidos y la Unión Europea.

Saludos

José Luis

When It comes to institutional investments here we are talking about a large sum of money getting involved. They can make a significant effect on the volatility of the price due to the ability to create a significant demand and supply. But still outperforming is something different and It includes, even more, players and factors in the market. So I believe they can't outperform.

No,,,,Institutional Investors can not beat the stock market every time....because macro and micro-economic issues and political issues are out of their reach....only they do speculate the market trends based on data available....

No not every time 

Yes and No. Some portfolio managers would have in mind some other criteria and considerations rather than risk and return. Indeed, given that the market shows a volatility excess, the risk is high and taking excessive risk position is not costless. In such case, a rational portfolio manager would prefer to be more adverse toward risk (has not interest to beat the market) in order to protect his reputation, etc.

You compare the performance of hedge funds with the retail traders performance. Then analyse their workshops, assets, risk management, technology, IT, insider trading, phishing, dark pools, HFT, brains, transparency, regulations, inequality to quality data access, etc. Take Simons hedge fund Renaissance Technologies, probably the best physics/mathematics department, employing no economist (!). One needs an edge over the rest in order to beat them in the long run. However, some may still naively promote and believe in EMH.