It’s that time again! The SPIVA mid-year update is here.
For the most part, it’s the same story, but a different day. Here’s the data:
This table outlines the percentage of actively managed investment funds that underperformed the corresponding passive index offered by S&P. For Large-Cap Core Funds… 95.34% of active funds did worse than the S&P 500. Looking at the rest of the table doesn’t exactly inspire confidence in the skills of active managers.
Another way to think about this is you have a 1-in-20 chance of picking a fund that will outperform the S&P 500. Are you willing to take that bet?
It’s astounding to me that so many active managers tout their ability to do better than a plain, old, boring passive index, when the data indicates that the vast majority of them fail to do so.
The reason for this, at least from my point of view, is that there is a lot of money on the line for these active managers. Active managers must market themselves as super smart, other-worldly investment talents in order to gather assets and increase their income. Too bad they often fall short of the hype.
