Fund manager David Paradice on 26 years, the index trap and why he backs founders over boards

Successful fund management requires a focus on business fundamentals, original thinking, and long-term discipline rather than chasing market momentum. David Paradice, a veteran fund manager, argues that evaluating companies based on earnings, competitive moats, and management quality remains the most reliable path to wealth creation. The increasing regulatory and government pressure on Australian superannuation funds to prioritize low-cost, passive index strategies risks distorting market pricing and limiting the effectiveness of active management. Investors must remain wary of "return envy" and the tendency to follow popular narratives, such as meme stocks or over-hyped sectors. Instead, identifying undervalued businesses in out-of-favor sectors and maintaining a generalist perspective allows for superior returns. Ultimately, the ability to learn from past errors—whether selling too early or misjudging a business model—is critical to navigating evolving market cycles and achieving sustained performance.