📅 Last updated: 8 May 2026
· 🏷 Topic: Behavioural finance, survivorship bias
· 🇧🇪 For: Belgian investors
Survivorship bias is the tendency to look only at the winners — and to forget the thousands of losers who tried the same strategy. It systematically misleads investors: active funds look better than they are, “successful” investors look smarter than they are, and risky strategies look less risky.
The classic example
In WWII, the US Navy analysed where bombers were most often hit. On the surviving aircraft, most of the bullet holes were in the wings and tail. The initial conclusion: “reinforce the armour there”.
The Hungarian statistician Abraham Wald pointed out the mistake. The aircraft being analysed were the survivors — they came back. The aircraft that were hit in the engine and cockpit did not return, so they were not in the dataset. That is where the armour needed to go.
How it misleads investors
1. Active funds that “beat the market”.
A fund group advertises: “Our Best Performers Fund has beaten the index 7 years in a row.” What they don’t mention: 19 other funds they had launched have meanwhile been closed due to poor performance. The “winner” was selected after the fact. This is exactly what the SPIVA study shows every year.
2. “Investment gurus” on social media.
YouTube is full of “I became a millionaire with stock picks”. For every successful stock-picker there are hundreds who tried the same and lost — you have never seen them on YouTube because they didn’t upload any videos.
3. Crypto millionaires.
Stories of “I bought Bitcoin in 2012 and became a millionaire” make an impression. What you don’t hear: thousands of others who bought crypto, did lock-ups, or got caught in scams and lost their money. The success rate is far lower than the stories suggest.
4. Belgian BEL 20 historical return.
A common claim: “BEL 20 historically delivers ~7%”. But that ignores that some BEL 20 companies of the past (Fortis, Dexia) became worthless — and were removed from the index. The index itself is a “winners’ index” — losers get replaced.
How to detect your own survivorship bias
Question 1: For every success story of an investor: how many people followed the same strategy and lost? Often you don’t know — which is already a warning.
Question 2: For an “impressive” track record of a fund: how many other funds did the fund group close in the same period?
Question 3: Is the strategy applicable to the average investor, or does it require time, knowledge and luck that most people don’t have?
Question 4: Does it also work after transaction costs and tax? Many “outperforming” strategies are paper gains that in reality get eaten away by TOB, withholding tax (RV) and spreads.
The practical implication
For most Belgian retail investors:
- A world index ETF is statistically a safer choice than a “successful” actively managed fund — because the active funds you see are the survivors of a much larger group, many of which have been merged away or liquidated.
- Stock-picking looks attractive thanks to visible success stories — but the invisible losers make it mathematically an uneven contest.
- “Safe strategies” that worked perfectly over the past 10 years can suddenly stop working tomorrow — survivorship bias masks risks.
💡 The best defence against survivorship bias: with every success story, ask yourself: “How many people tried exactly this same strategy and lost — and would I ever hear about it?” Often the answer is no.
📌 Belgian tax note (2026): survivor-bias-driven stock-picking strategies look even worse net of Belgian frictions — TOB on every trade, 30% withholding on dividends, and since 2026 a 10% capital gains tax on net realised gains above the €10,000 annual exemption.
🔗 See Behavioural finance(NL) for the broader overview of psychological pitfalls.
The FSMA list is itself a survivor list
This is the Belgian application most often missed. Investors are rightly advised to consult the list of funds registered in Belgium — not least because registration sets the stock-exchange tax rate. But that list shows what exists today.
Funds that were wound up or merged are no longer on it. Comparing the historical returns of “the available funds” therefore compares survivors by definition. The weakest performers have quietly left the sample, usually precisely because they performed weakly.
The same holds for brokers’ fund lists, for “top 10” round-ups in the financial press, and for backtests of factor strategies built only on indices that made it to the present.
Where you meet it in practice
- Fund comparison tools. A five-year category average contains only funds that survived those five years. The true average for someone who invested five years ago was lower.
- Investing stories. The investor describing how they held one stock for years is the visible outcome. Others who ran the same strategy on a different stock do not write it up.
- Individual shares from the BEL 20 or any index. The index renews itself: weak companies drop out. It has a built-in survival mechanism your own portfolio does not automatically share.
What to do about it
The practical defence is dull and effective: prefer broadly diversified index funds to selections of “best” funds, distrust any return figure that does not state whether closed funds are included, and judge a strategy on its full starting universe — not on what survived.
Sources
- SPIVA Europe — Active vs index study
- Wikifin — Investment biases
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