Bolstering the case for passively managed exchange traded fund as a good way for investors to tap into the equities market, active stock fund managers just experienced one of their worst quarters in almost two decades.
Less than one in five large-cap funds outperformed the benchmark S&P 500 Index, the lowest number of beats since at least 1998, reports Jeff Cox for CNBC.
After a tumultuous start to the new year, the SPDR S&P 500 ETF (NYSEArca: SPY) regained its lost ground and eked out a 1.5% return over the first quarter.
Among the various investment categories, growth-focused active funds were the worst performers, with only 6% of managers beating their benchmarks.
The SPDR S&P 500 Growth ETF (NYSEArca: SPYG), which targets large-cap growth stocks taken from the S&P 500, was up 1.1% over the first three months of the year.
On the other hand, value managers fared better with a 19.6% outpacing their passive benchmarks.
After the mid-February lows, value stocks led the market rebound. For instance, the SPDR S&P 500 Value ETF (NYSEArca: SPYV) was 1.7% higher over the first quarter. Additionally, dividend-oriented ETFs also outperformed, with the Vanguard Dividend Appreciation ETF (NYSEArca: VIG) up 5.3%, iShares Select Dividend ETF (NYSEArca: DVY) up 9.0% and SPDR S&P Dividend ETF (NYSEArca: SDY) up 9.2% over the past three months.