Why Do Most Funds Look Good in Bull Markets? Learning how to beat benchmarks by Lane Clark of TPP.

Why Do Most Funds Look Good in Bull Markets?

Let me ask you something uncomfortable.

If your fund is up 18% in a year when the index is up 20%…

Are you impressed?

Most investors are.

They see green numbers. hey see positive returns. They assume skill.

But here’s the reality:

Most funds look good in bull markets.

And it has very little to do with brilliance.

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The Rising Tide Fallacy:

There’s an old saying:

A rising tide lifts all boats.

In markets, this becomes dangerous.

When liquidity is abundant and sentiment is strong, asset prices rise broadly.

Index up?
Most long-only funds go up too.

That doesn’t mean they’re skilled. It means they’re exposed.

There’s a big difference.

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Beta Disguised as Brilliance:

In simple terms:

Beta = market exposure.
Alpha = genuine skill.

When markets rally hard, beta looks like alpha.

If the S&P is up 25% and your fund is up 22%, you haven’t demonstrated edge.

You’ve demonstrated participation, but participation isn’t protection.

And it certainly isn’t proof of risk management.

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Why Bull Markets Hide Weakness:

Bull markets mask:

• Poor risk controls
• Lazy stock selection
• Overexposure to crowded trades
• Lack of downside discipline

Everything feels smart when prices rise. Even overleveraged portfolios look genius.

Until they don’t.

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The Real Test Isn’t Up Markets:

Anyone can look competent when central banks are easing, earnings are rising and sentiment is strong.

The real test is:

What happens when volatility spikes?

What happens when leadership rotates?

What happens when markets fall 20–30%?

That’s when beta gets exposed.

That’s when skill, or lack of it, becomes obvious.

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Why This Matters Now:

We’ve just lived through one of the most liquidity-fuelled market environments in history.

AI. Tech. Mega caps. Everything went up.

Many funds looked fantastic.

But how much of that was positioning?

And how much was simply riding the index higher?

If your fund can’t outperform meaningfully in a bull market, what do you expect it to do in a bear one?

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What Investors Should Actually Be Looking For:

Instead of just asking:

“How much did it make?”

Ask:

• How much risk did it take?
• How concentrated was it?
• How did it behave during pullbacks?
• Does it adapt to volatility?

True skill shows up in risk-adjusted returns.

Not just raw numbers.

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The TPP View:

We don’t judge performance based on sunshine. We judge it based on adaptability.

Bull markets are easy. Sideways and volatile markets are where discipline matters.

Anyone can ride the wave.

Very few can manage the storm.

If you’d like to see how our strategies perform across different environments, not just bull phases, take a look at the performance charts.

Because rising tides don’t prove skill.

Navigation does.

👉 View TPP's live performance of ALL of benchmark beating strategies by clicking here.....

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Or if you would like to find out more, schedule an absolutely FREE portfolio consultation call with our team by clicking here....Find out why TPP is disrupting the old stale wealth management model. Join the disruption.....

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