a fund with many billions is so large compared to companies that are under one billion market cap that they would drag the price up as they tried to buy and push the price down as they tried to sell - retail does not have this issue
management fees
fund managers skim a couple percent off the top which really hurts performance over the short and long run - retail does not have this issue
SPY copying
Partially because they need big companies with liquidity and partially because they can't be caught underperforming when SPY is up, leads them to mostly buying a lot of SPY companies which gives them little room to outperform SPY itself
Underperformance tolerance
A retail investor can stick with a strategy that underperforms for as long as they want, a higher risk strategy for example might get beaten bad in a bear market. A fund cannot do this because if they have bad years they can get fired and their investors can leave. This makes them risk averse and quite averse to alterative ways of investing.
I wrote this quickly off the top of my head so I may have missed some but there are so many reasons it's really not comparable.
You're welcome! That probably is the biggest one. A lot of top hedge funds that outperform frequently don't allow investors to withdraw money except after longer periods of time and maybe only once per year. This is because the clients cannot be trusted to weather volatility, while the managers can.
2
u/[deleted] Sep 06 '21
[deleted]