This article originally appeared in the October issue of Wealth Management Magazine and online at WealthManagement.com.
A twice-yearly pall has settled over mutual fund managers in the wake of the latest SPIVA Scorecard's release. For the past 14 years, the S&P Indices Versus Active Funds Scorecard, now published by S&P Dow Jones Indices, has measured the performance of actively managed equity and fixed income portfolios against their respective benchmarks.
The Scorecard, according to its sponsor, is the "de facto scorekeeper of the active-versus-passive debate."
And, as is usually the case, the latest edition shows that, in the aggregate, active management tends to underperform passive management, net of fees. For the one-year period ending June 30, 2016, only 9.8 percent of 2,600+ domestic equity funds beat the performance of the S&P Composite 1500 Index.
On the fixed income side, the one-year results were sunnier for active managers in medium-term investment-grade… Read More …