Actively managed mutual funds have been a staple for many investment portfolios, but their performances have not been consistent. Instead, investors wary of less reliable options may look to passive, index-based exchange traded funds that deliver what they promise to do.
According to the latest S&P Dow Jones Indices’ SPIVA U.S. scorecard for mid-year 2017, 56.6% of large-cap active managers underperformed the S&P 500 at over the year ended June 2017, while 60.7% of mid-cap managers underperformed the S&P MidCap 400 and 59.6% of small-cap managers underperformed the S&P SmallCap 600.
In the 12-month period ended June 30, growth has been a standout play as many growth-oriented companies rallied post-election. Consequently, growth managers across all three market cap ranges fared better than their core and value counterparts.
“The results highlight the cyclicality of style managers, as core managers fared the best six months prior with the exception of small caps, while value managers outperformed both core and growth one year prior,” Aye M. Soe, Managing Director of Global Research & Design, and Ryan Poirier, Senior Analyst of Global Research & Design, said a S&P Dow Jones Indices research note.
Even with these numbers, the year ended June 2017 was seen as a relatively better period for active managers, which is not saying much for the overall actively managed fund segment as most managers underperformed widely observed benchmarks over time.