The Dow is at a record high and corporate profits continue to grow, so it could be time for stock pickers to make a comeback, reports Alexandra Scaggs at Dow Jones Newswires.
“So, as corporate financial results improve, company-specific factors such as earnings appear to matter more in terms of share movements, according to market strategists,” according to the report.
“That presents an opportunity for the investment managers who make their trade by crafting portfolios stock by stock on company fundamentals, known as active managers, as opposed to those to set up their portfolios to track stock indexes,” it added. “The traditional active managers oversee mutual funds, and they are often buy-and-hold-style investors. Since 2007, passive index funds, which track a benchmark and are cheaper than their active brethren, have outdone them in terms of yearly returns. But that may be changing.”
Of course, longtime indexing fans who use ETFs won’t be holding their breath.
For more information on ETF indexing, visit our indexing category.
Max Chen contributed to this article.