How does this compare with current conditions? The table below shows a dramatic difference:
In contrast to the tailwind that the outperformance of the average stock often generates, in the third quarter, managers faced a headwind. Moreover, dispersion is quite low by historical standards, meaning that even managers skillful enough to navigate through the headwind are unlikely to generate large rewards for doing so.
Active equity investors are likely to be disappointed by third quarter results.
This article was written by Craig Lazzara, global head index investment strategy, S&P Dow Jones Indices.
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