Speaking to the strong performance of the U.S. dollar given last year’s four rate hikes, the average active dollar ousted the average active fund–evidence that investors erred on the side of cheaper, but higher-quality funds.
Lower cost-funds were more successful about twice as often as their more expensive counterparts–a 32.5% success rate versus 17.2% success rate–over the 10-year period ended Dec. 31, 2018. Not only were these cheaper funds able to outperform costlier funds, but they had better longevity–about two-thirds of the cheaper funds survived versus half of the more expensive funds.
Other notable data points include actively-managed large cap funds having better success compared to active mid- and small-cap funds in the long term. The success rates of mid-cap funds were more widely-dispersed versus those of large- and small-cap funds.
Small-cap funds, however, had better survival rates compared to large- and mid-cap funds. 54 percent of active small-cap funds survived compared to 41 percent for large-cap and 53 percent for mid-cap.
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