It’s sunny in London. The markets are falling. If you’re still struggling to generate that elusive alpha you might be interested in the below (H/T Alea).
New York, April 20, 2009- Standard & Poor’s Index Services released today the year-end 2008 results for its Standard & Poor’s Index Versus Active Fund Scorecard (SPIVA). Over the five year market cycle from 2004 to 2008, the SPIVA scorecard shows that the S&P 500 outperformed 71.9% of actively managed large cap funds, the S&P MidCap 400 outperformed 75.9% of mid cap funds, and the S&P SmallCap 600 outperformed 85.5% of small cap funds. These results are similar to that of the previous five year cycle from 1999 to 2003.
And a bit of commentary from S&P’s global head of research
“The belief that bear markets strongly favor active management is a myth,” says Srikant Dash, Global Head of Research & Design at Standard & Poor’s. “A majority of active funds in each of the nine domestic equity style boxes were outperformed by indices during the down markets of 2008. The bear market of 2000 to 2002 showed similar outcomes.”
Of course, there’s more than a touch of irony in a ratings agency chiding fund managers for not living up to their stated purpose, but for those of you fund managers looking for an excuse to sit in the sun for a while you can now go forth and tan. Or perhaps meditate on the meaning of your existence.
The full S&P report is available here.
Related link:
Businessman lay down in street to sunbathe – Ananova
Fund of fund redemptions soar in Q1 – FT Alphaville