FYI: Over the past 5 years, the average active large-cap stock fund manager has underperformed the S&P 500 100% of the time
The passive revolution has been a boon for investors.
Passive investing, in which the creator of a fund assembles a basket of securities that track an index, is naturally less costly than funds that employ money managers to proactively shuffle the portfolio’s holdings. What’s more, passive funds also provide better returns than actively-managed ones, making them a no-brainer for most investors.
But that outperformance doesn’t hold for bonds. In fact, actively-managed bond funds do better than passively-managed ones. A research paper from Guggenheim Partners explains why, with insights that might help investors make better decisions about where to put their money.
First, some numbers: Over the past five years, the average active large-cap equity fund manager has underperformed the benchmark index, the S&P 500 SPX, -0.12% , 100% of the time, Guggenheim says. During that same period, active intermediate-term bond fund managers have outperformed their benchmark 57% of the time.
Regards,
Ted
https://www.marketwatch.com/story/heres-why-bond-funds-are-better-under-active-managers-2019-11-05/print
