Here's How 18 Categories Of Equity Funds Measure Up Against Their Respective Indices
S&P Dow Jones Indices just published its scorecard of S&P indices versus active funds (SPIVA). Active funds are the funds that attempt to offer some sort of superior return relative to some benchmark.
"According to the figures, 55.8% of large-cap managers and 68.09% of small-cap managers underperformed the benchmarks over the past 12 months ending Dec. 31, 2013," said Aye Soe, director of index research and design.
"The picture is equally unfavorable when reviewing the performance over the longer-term three- and five-year investment horizons. The results show that the majority of the active managers across all the domestic equities categories failed to deliver returns higher than their respective benchmarks."
Below is a table from S&P showing 18 categories of funds. For some categories, more than half of the funds seem to be able to pull-off better returns over short periods.
But as you can see in the red box, there's no category in which more than half of the funds have beaten the index over a five year period.
"There is nothing novel about the index versus active debate," said Soe. "It has been a contentious subject for decades, and there are a few strong believers on both sides, with the vast majority of investors falling somewhere in between."
