After noting that most active U.S. equities funds topped their benchmarks for the year-to-date through June 30, Morningstar’s chief ratings officer Jeffrey Ptak broke down the success rates of active U.S. stock funds during this period by category. According to his calculations, value fared better than growth, and small-cap did better than large-cap.
“Value, blend funds succeeding more often than growth; mid, small more than lrg,” Ptak wrote on Twitter.
And here’s YTD success rates of active US stock funds through 6/30/22, by category. Value, blend funds succeeding more often than growth; mid, small more than lrg. Short period I know, but active US stock has been in a bad funk so worth monitoring changes. Happy 4th, y’all. pic.twitter.com/U82CRfP5Mk
— Jeffrey Ptak (@syouth1) July 3, 2022
Prior to posting this tweet, Ptak noted on social media that roughly “63% of active US stock funds had topped their category index for YTD through 6/30/22 (~67% pre-fees).” Ptak added that the success rate among international stocks, however, was “half that.”
“The relative performance for active small-cap managers in the first half is impressive given the market volatility. Managers were able to find hidden gems and demonstrate a value add in a challenging environment,” said Todd Rosenbluth, head of research at VettaFi.
With inflation the highest it’s been in four decades and interest rates rising, markets are expected to remain volatile. In such a volatile market, passive ETFs may not offer protection against downside risk. They also don’t offer investors a way to seek above-average returns.
With index funds unable to provide strong returns or protect against downside risk, active ETFs are “picking up steam with investors,” with more holding active ETFs in their portfolios now than did two years ago, according to Trackinsight’s Global ETF Survey 2022. Per Pensions & Investments, 37% of survey respondents plan to increase the share of active ETFs in their portfolios by at least 5% this year, up from 25% who said the same in 2020.
T. Rowe Price offers a suite of actively managed ETFs. T. Rowe Price has been in the investing business for over 80 years through conducting field research firsthand with companies, utilizing risk management, and employing a bevy of experienced portfolio managers carrying an average of 22 years of experience.
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