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Pg L2: It took a bear market for ACTIVE funds to shine. Over 50% of active funds outperformed their passive peers; the drag was from active growth funds and only 30% outperformed passive peers; active funds in 6 of 9 M* 9-styles outperformed their passive peers. Value/cyclicals outperformed growth. Active managers can better sort out among profitable and unprofitable companies and the latter did much worse with rising RATES (low rates encouraged speculation). Wide sector divergences also work for active managers. Passive mutual fund AUMs have exceeded those of the active mutual funds since 2019; some of the shift has been from active mutual funds to ETFs. But the record of active funds remains dismal over the long-term. An ACTIVE-PASSIVE strategy can also work – active for smaller, less liquid areas (SCs, HYs, EMs, etc), passive for larger, liquid areas (LC-growth, etc). CAUTIONS: Aggressive active funds may differ widely in performance; long-term performers aren’t short-term chart beaters, but those that consistently remain in 2nd-3rd quartiles. Active funds mentioned for long-term: Growth: PRWAX, APGAX, ANOIX, GQEIX (cyclical growth) Blend: BOSOX, FSCRX, IHGIX, PRSVX Value: DAGVX, OIEIX, PEYAX
Pg L7: It was a tough quarter for ETFs. Even the energy ETFs tumbled in Q2. The EMs have been losing steam since 2021/Q1, but their China weight helped them some in Q2. Bond ETFs sold off as well. The ETFs that bet on rates, currencies and volatility did better.
EXTRA: While STOCK funds did poorly in Q2, it was a quarter to forget for BOND funds. There were heavy outflows from bond funds. Short-term and FR/BL funds held up better. COMMODITY funds did fine (but they had a late selloff).
EXTRA: High INFLATION will be around for a while. The following funds may offer inflation protection (some choices like core bond funds are unclear): Real Assets: AAAAX, PZRMX; GSG Stocks: ACSTX, FLCSX; IWM (cyclical exposure) Bonds: DODIX (?), FTHRX (?), PRFRX, VIPSX; TIPX I-Bonds (limited annual amounts)
Pg L33: In 2022/Q2 (SP500 -16.21%): Among general equity funds, the best was equity income -10.77% (yes, it was a BAD Q2) and the worst were all growth categories, multi-cap-growth -23.13%, MC-growth -21.70%, LC-growth -21.60%, SC-growth -19.10%; ALL general equity categories were negative by double-digit %. Among other equity funds, the best was China +3.68%, and the worst were precious metals -27.08%, science & tech -24.09%, Lat Am -22.17%. Among fixed-income funds, domestic long-term FI -5.26%, world income -8.41% (not very refined in Lipper mutual fund categories listed in Barron’s).
Comments
Barron’s Funds Quarterly (2022/Q2–July 11, 2022)
https://www.barrons.com/topics/mutual-funds-quarterly
Pg L2: It took a bear market for ACTIVE funds to shine. Over 50% of active funds outperformed their passive peers; the drag was from active growth funds and only 30% outperformed passive peers; active funds in 6 of 9 M* 9-styles outperformed their passive peers. Value/cyclicals outperformed growth. Active managers can better sort out among profitable and unprofitable companies and the latter did much worse with rising RATES (low rates encouraged speculation). Wide sector divergences also work for active managers. Passive mutual fund AUMs have exceeded those of the active mutual funds since 2019; some of the shift has been from active mutual funds to ETFs. But the record of active funds remains dismal over the long-term. An ACTIVE-PASSIVE strategy can also work – active for smaller, less liquid areas (SCs, HYs, EMs, etc), passive for larger, liquid areas (LC-growth, etc). CAUTIONS: Aggressive active funds may differ widely in performance; long-term performers aren’t short-term chart beaters, but those that consistently remain in 2nd-3rd quartiles. Active funds mentioned for long-term:
Growth: PRWAX, APGAX, ANOIX, GQEIX (cyclical growth)
Blend: BOSOX, FSCRX, IHGIX, PRSVX
Value: DAGVX, OIEIX, PEYAX
Pg L7: It was a tough quarter for ETFs. Even the energy ETFs tumbled in Q2. The EMs have been losing steam since 2021/Q1, but their China weight helped them some in Q2. Bond ETFs sold off as well. The ETFs that bet on rates, currencies and volatility did better.
EXTRA: While STOCK funds did poorly in Q2, it was a quarter to forget for BOND funds. There were heavy outflows from bond funds. Short-term and FR/BL funds held up better. COMMODITY funds did fine (but they had a late selloff).
EXTRA: High INFLATION will be around for a while. The following funds may offer inflation protection (some choices like core bond funds are unclear):
Real Assets: AAAAX, PZRMX; GSG
Stocks: ACSTX, FLCSX; IWM (cyclical exposure)
Bonds: DODIX (?), FTHRX (?), PRFRX, VIPSX; TIPX
I-Bonds (limited annual amounts)
Pg L33: In 2022/Q2 (SP500 -16.21%): Among general equity funds, the best was equity income -10.77% (yes, it was a BAD Q2) and the worst were all growth categories, multi-cap-growth -23.13%, MC-growth -21.70%, LC-growth -21.60%, SC-growth -19.10%; ALL general equity categories were negative by double-digit %. Among other equity funds, the best was China +3.68%, and the worst were precious metals -27.08%, science & tech -24.09%, Lat Am -22.17%. Among fixed-income funds, domestic long-term FI -5.26%, world income -8.41% (not very refined in Lipper mutual fund categories listed in Barron’s).