ETFdb Logo
ETFdb Logo
  • ETF Database
  • Channels
    • Active ETF
    • Alternatives
    • Beyond Basic Beta
    • China Insights
    • Climate Insights
    • Commodities
    • Core Strategies
    • Crypto
    • Disruptive Technology
    • Dividend
    • Dual Impact
    • Emerging Markets
    • Energy Infrastructure
    • ESG
    • ETF Building Blocks
    • ETF Education
    • ETF Strategist
    • Fixed Income
    • Free Cash Flow
    • Future ETFs
    • Global Diversification
    • Gold & Silver Investing
    • Innovative ETFs
    • Institutional Income Strategies
    • Leveraged & Inverse
    • Managed Futures
    • Market Insights
    • Megatrends
    • Modern Alpha
    • Multi-Asset
    • Night Effect
    • Portfolio Strategies
    • Retirement Income
    • Richard Bernstein Advisors
    • Tax Efficient Income
    • Thematic Investing
    • Volatility Resource
  • Tools
    • ETF Screener
    • ETF Country Exposure Tool
    • ETF Sector Tracker Tool
    • ETF Database Categories
    • Head-To-Head ETF Comparison Tool
    • ETF Stock Exposure Tool
    • ETF Issuer Fund Flows
    • Indexes
    • Mutual Fund To ETF Converter
    • ETF Data for Journalists
    • ETF Nerds
  • Research
    • First Bitcoin ETF
    • ETF Education
    • Equity Investing
    • Dividend ETFs
    • Leveraged ETFs
    • Inverse ETFs
    • Index Education
    • Index Insights
    • Top ETF Sectors
    • Top ETF Issuers
    • Top ETF Industries
  • Webcasts
  • Themes
    • AI ETFs
    • Blockchain ETFs
    • See all Thematic Investing ETF themes
    • ESG Investing
    • Marijuana ETFs
  • Multimedia
    • ETF 360 Video Series
    • ETF Trends on Videos
    • ETF Trends on Podcasts
    • ETF Prime Podcast
  • Company
    • About Us
    • Swag Store
  • PRO
    • Pro Content
    • Pro Tools
    • Advanced
    • FAQ
    • Pricing
    • Free Sign Up
    • Login
  1. Active Managers Fared Better Than Indexes This Year
News
Share

Active Managers Fared Better Than Indexes This Year

Todd RosenbluthSep 15, 2022
2022-09-15

The 12-month period ended June 2022 was relatively strong for actively managed U.S. equity mutual funds, compared to common S&P benchmarks, but the long-term challenges to keep up, let alone survive, remain high.

According to the just-released SPIVA U.S. Scorecard Mid-Year 2022 report, 55% of large-cap funds underperformed the S&P 500 Index in the one-year period ended June, or said more directly to those who have stayed loyal to active funds, 45% outperformed, and 48% did so in the first six months of 2022, for those who prefer a calendar-year-only focus.

Meanwhile, the batting averages for mid-cap funds and small-cap funds relative to the S&P Mid-Cap 400 and S&P SmallCap 600 Indexes were oddly nearly identical, with 46% and 45% outperforming in the most recent 12-month period, respectively. In its report, S&P Dow Jones Indices noted that high equity dispersion in 2022, a measure of how spread out the returns of the constituents in a benchmark are, created greater possibility of generating above-average performance through judicious stock selection. However, the recent success is not consistent with the longer-term investing trend, in part due to the high fees active funds charge and the difficulty in consistently finding winners.

Just 16% of large-cap funds outshined the S&P 500 over five years, while 10% and 7% did so over the last 10 or 20 years. A long-term perspective, which is what most mutual funds are built for, was also not kind to the average mid- and small-cap fund.

A mere 20% and 6% of mid-caps outperformed the S&P MidCap 400 Index over the past 10 and 20 years ended June 2022, while only 9% and 6% of small-cap managers found enough hidden gems over these decades to keep up the benchmarks.

These trends should be of little surprise to many ETF-focused advisors or readers of this Experts Insights page, as VettaFi covered these topics based on year-end 2021 figures and more in a pre-release of the SPIVA data and some lessons we learned. In that piece, we noted that ETF demand has swelled in the past two decades due in part to the challenges active managers have faced. Advisors and end clients decided it was better to replicate the S&P 500 than to try and often fail to beat the index. ETFs like the SPDR S&P 500 ETF Trust (SPY A), the iShares Core S&P 500 ETF (IVV A), the Vanguard S&P 500 Index (VOO A), and the SPDR Portfolio S&P 500 ETF (SPLG A-) manage over $900 billion in assets today. 

While the 42-page report has lots more great data worthy of attention, and we might dive into more in the future, we’d note that mutual funds continue to disappear, either being closed or merged out of existence. One of the benefits of the SPIVA data is that it corrects for survivorship bias and notes the percentage of funds that remain. For example, there were 1,003 U.S. large-cap funds used in the research as of June 2012, avoiding double-counting multiple share classes, but only 63% had survived. Meanwhile, there were 544 small-caps, but only 66% were still around.  

Though the latest SPIVA scorecard might offer reasons for optimism for managers of active equity mutual funds, we believe that advisors understand the long-term challenges in finding funds that consistently outperform the benchmark and will continue to seek out ETF alternatives.

For more news, information, and strategy, visit VettaFi.


Content continues below advertisement

» Popular Pages

  • Tickers
  • Articles

Jan 31

Confluence Asset Allocation Quarterly Q1 2023

Jan 31

Embrace a “Dividend Decade” in a Quality Dividend ETF

Jan 31

ETF Prime: Disruptive Tech and International Stocks

Jan 31

Emerging Markets Ex China ETF Launched by Strive

Jan 31

QINT Catches Eyes With Quality International Equities

Jan 31

Investors Look to Equal-Weight and Quality Factors

Jan 31

Bonds Facing a Better Year: Capture With BNDI

Jan 31

Top Performing Leveraged/Inverse ETFs: 01/29/2023

Jan 31

Use SNPV & SNPE to Invest in GM’s EV Acceleration

Jan 31

Canada ETF FLCA Poised to Profit From Geopolitics

QQQ

Invesco QQQ Trust

SPY

SPDR S&P 500 ETF Trust

VOO

Vanguard S&P 500 ETF

VGT

Vanguard Information...

SMH

VanEck Semiconductor ETF

XLK

Technology Select Sector SPDR...

VTI

Vanguard Total Stock Market...

SOXX

iShares Semiconductor ETF

BLOK

Amplify Transformational Data...

META

Roundhill Ball Metaverse ETF


Content continues below advertisement

Loading Articles...
Help & Info
  • Contact Us
Tools
  • ETF Screener
  • ETF Analyzer
  • Mutual Fund to ETF Converter
  • Head-To-Head ETF Comparison
  • ETF Country Exposure Tool
  • ETF Stock Exposure Tool
  • ETF Performance Visualizer
  • ETF Database Model Portfolios
  • ETF Database Realtime Ratings
  • ETF Database Pro
More Tools
  • ETF Launch Center
  • Financial Advisor & RIA Center
  • ETF Database RSS Feed
Explore ETFs
  • ETF News
  • ETF Picks of the Month
  • ETF Category Reports
  • Premium Articles
  • Alphabetical Listing of ETFs
  • Best ETFs
  • Browse ETFs by ETF Database Category
  • Browse ETFs by Index
  • Browse ETFs by Issuer
  • Compare ETFs
Legal
  • Terms of Use and Privacy Policy
  • © 2023 VettaFi LLC. All rights reserved.
Follow ETF Database
Follow ETF Database

Advertisement

Is Your Portfolio Positioned With Enough Global Exposure?

ETF Education Channel

How to Allocate Commodities in Portfolios

Tom LydonApr 26, 2022
2022-04-26

A long-running debate in asset allocation circles is how much of a portfolio an investor should...

Core Strategies Channel

Why ETFs Experience Limit Up/Down Protections

Karrie GordonMay 13, 2022
2022-05-13

In a digital age where information moves in milliseconds and millions of participants can transact...

}
X