Highlights from the 2013 S&P Scorecard

Standard & Poors just released their semi-annual review of actively managed mutual funds, taking a statistical look at how many managers are beating their respective benchmarks across multiple asset classes.  The data show what we already know: most active managers under-performed over the last one, three and five years.  Take a look at the far right column and see five-year results.


Even in the best category, two-thirds of actively managed funds underperformed their benchmarks.  As we’ve noted elsewhere before, there is little to no consistency with those managers that might outperform – the odds of you picking a fund that has outperformed and will continue to outperform are about one in twenty. So, good luck with that.

The other astonishing fact that comes out of this report is how many actively managed mutual funds are shuttered each year. After a five year period, over 25% of US stock funds, 24% of international equity funds and 21% of bond funds had ceased to exist through liquidations or mergers into other funds.  Fund mergers are a convenient way for fund companies to make ugly funds disappear.

If you’re into this sort of thing, you can download the full report here:

SPIVA® U.S. Year-End 2013

Continue Reading

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Active vs. Passive Mid Year Check Up

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