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Fees Exacerbated A Lost Decade For Active Managers
For a long time now, I've been fascinated by the research summarized in the biannual SPIVA reports. That fascination helps me in making asset allocation and active/passive investment decisions. You too just might find the SPIVA studies a useful addition to your data when making your portfolio decisions.
The references provided in this thread have been superseded by a more recent SPIVA release that includes all 2016 data. Here is a Link to that report:
The numbers change, but the basic conclusion remains unchallenged. Active fund management is a difficult chore when it's success is measured against a realistic benchmark.
This end of 2016 SPIVA report now includes 15 year data summaries. These extended timeframe data sets reinforce the conclusion of just how daunting beating a benchmark really is.
In very general terms, in all fund categories, less than 20% of active fund managers outdistanced their benchmarks. That's depressing unless an investor was prescient enough to anticipate that successful cohort early in any cycle.
The SPIVA document also has category charts for 3-year periods. Over that shorter timeframe, a higher fraction of fund managers do deliver outsized outcomes but the percentages change dramatically over various .3-year periods. Investing is never easy and certainly never a certainty.
Please access this SPIVA research report. It will contribute to your investment toolkit and decision making in a positive way.
@MJG: " "The references provided in this thread have been superseded by a more recent SPIVA release that includes all 2016 data. Here is a Link to that report:" Just to be clear, the SPIVA data from both of my links is from 12/31/16. regards, Ted
Comments
For a long time now, I've been fascinated by the research summarized in the biannual SPIVA reports. That fascination helps me in making asset allocation and active/passive investment decisions. You too just might find the SPIVA studies a useful addition to your data when making your portfolio decisions.
The references provided in this thread have been superseded by a more recent SPIVA release that includes all 2016 data. Here is a Link to that report:
https://us.spindices.com/documents/spiva/spiva-us-year-end-2016.pdf
The numbers change, but the basic conclusion remains unchallenged. Active fund management is a difficult chore when it's success is measured against a realistic benchmark.
This end of 2016 SPIVA report now includes 15 year data summaries. These extended timeframe data sets reinforce the conclusion of just how daunting beating a benchmark really is.
In very general terms, in all fund categories, less than 20% of active fund managers outdistanced their benchmarks. That's depressing unless an investor was prescient enough to anticipate that successful cohort early in any cycle.
The SPIVA document also has category charts for 3-year periods. Over that shorter timeframe, a higher fraction of fund managers do deliver outsized outcomes but the percentages change dramatically over various .3-year periods. Investing is never easy and certainly never a certainty.
Please access this SPIVA research report. It will contribute to your investment toolkit and decision making in a positive way.
Best Regards
"The references provided in this thread have been superseded by a more recent SPIVA release that includes all 2016 data. Here is a Link to that report:" Just to be clear, the SPIVA data from both of my links is from 12/31/16.
regards,
Ted
You're absolutely on-target. Sorry I missed that obvious point. I need a second, no a third, cup of coffee. Thanks for your correction.
Best Wishes