ETFdb Logo
ETFdb Logo
  • ETF Database
  • Channels
    • Themes
      • Active ETF
      • Artificial Intelligence
      • Beyond Basic Beta
      • China Insights
      • Climate Insights
      • Core Strategies
      • Crypto
      • Disruptive Technology
      • Energy Infrastructure
      • ETF Building Blocks
      • ETF Investing
      • ETF Education
      • ETF Strategist
      • Financial Literacy
      • Fixed Income
      • Free Cash Flow
      • Innovative ETFs
      • Institutional Income Strategies
      • Leveraged & Inverse
      • Managed Futures
      • Market Insights
      • Modern Alpha
      • Multifactor
      • Responsible Investing
      • Retirement Income
      • Tax Efficient Income
    • Asset Class
      • Equity
        • U.S. Equity
        • Int'l Developed
        • Emerging Market Equities
      • Alternatives
        • Commodities
        • Gold/Silver/Critical Minerals
        • Currency
        • Volatility
      • Fixed Income
        • Investment Grade Corporates
        • US Treasuries & TIPS
        • High Yield Corporates
        • Int'l Fixed Income
    • ETF Ecosystem
    • ETFs in Canada
  • 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
  • Research
    • 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 of the Week Podcast
    • ETF Prime Podcast
    • Video
  • Company
    • About VettaFi
    • Get VettaFi’ed
  • 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

Dec 01

Harvest Emerging Markets Bond Tax Losses With XEMD

Dec 01

Generative AI Reach Accessible in These ETFs

Dec 01

Eye Active Real Estate ETF REIT’s Tech Action

Dec 01

India Could Again Be EM Winner in 2024

Dec 01

Despite Challenges, Brazil Should Top Soybean Exports Next Year

Dec 01

Integrate AI Into Your Practice: Actions You Can Take Today with ChatGPT and Midjourney

Dec 01

Meet a Strategist: Rob Williams of Sage Advisory

Dec 01

Thematic Way to Go in Search for Clean Energy Exposure

Dec 01

Uranium Price Rally Continues to Mystify Commodities Market

Dec 01

Consider Non-Traditional Alpha Insights for Core Allocations

QQQ

Invesco QQQ Trust Series I

SPY

SPDR S&P 500 ETF Trust

VOO

Vanguard S&P 500 ETF

VGT

Vanguard Information...

XLK

Technology Select Sector SPDR...

SCHD

Schwab US Dividend Equity ETF...

SMH

VanEck Semiconductor ETF

IYW

iShares U.S. Technology ETF

VTI

Vanguard Total Stock Market...

TLT

iShares 20+ Year Treasury...


Content continues below advertisement

Loading Articles...
Our Sites
  • VettaFi
  • Advisor Perspectives
  • ETF Trends
Tools
  • ETF Screener
  • Mutual Fund to ETF Converter
  • Head-To-Head ETF Comparison
  • ETF Country Exposure Tool
  • ETF Stock Exposure Tool
  • ETF Database Pro
More Tools
  • Financial Advisor & RIA Center
Explore ETFs
  • ETF News
  • ETF Category Reports
  • Premium Articles
  • Alphabetical Listing of ETFs
  • Browse ETFs by ETF Database Category
  • Browse ETFs by Index
  • Browse ETFs by Issuer
  • Compare ETFs
Information
  • Contact Us
  • Terms of Use and Privacy Policy
  • © 2023 VettaFi LLC. All rights reserved.

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