Active Fund Performed “So-So” in 2019

Although the markets “treated investors kindly last year,” a recent Morningstar article points out that most active funds lagged their benchmarks. Morningstar conducted a study of calendar-year total returns of all actively managed stock and bond funds between January 2005 and December 2019. Here is a summary of the findings: Approximately 40% of active funds beat their indexes last year, only a slight improvement from 2018. Only 20% of active U.S. stock funds outperformed their… Read More

Are Active Funds Really Dead?

A recent article in offers insights regarding industry claims that investors are “fleeing active funds in droves, but concludes that the outlook isn’t as bleak as some might suggest. Citing reporting from a recent piece in Barron’s, the article explains that some of the outflow is attributable to institutional investors who “have been shifting to unregistered collective accounts that replicate a fund’s strategy, but at a lower cost.” While these would be counted as… Read More

Bear Market Would Deliver Death Punch to Active Funds

A recent Bloomberg article warns that, while active fund managers are tempted by the thought that a market downturn would allow them to showcase their talents to investors—that a “human hand” is better than the ‘dumb’ passive funds that investors have favored—”it would actually be the worst possible situation for them and likely result in a messy and hurried consolidation of the entire industry like nothing we’ve seen before.” The article asserts that the such… Read More

Morningstar: Can Active Stock Funds Insulate Investors from Market Downturns?

A recent Morningstar article outlines the firm’s performance analysis of active U.S. equity funds in both “down” and “up” markets over the twenty years ending January 2018 to determine whether they can help insulate investors from market downturns. The study found that “nearly 60% of unique active U.S. stock funds beat their indexes during the late- January/early-February correction:” Morningstar also found that those funds able to beat their benchmarks in down periods did so by… Read More

Active Fund Performance Improved in Recent Months

Morningstar data shows that, in February, actively managed mutual funds posted their first month of positive net inflows since April 2015, according to an article in The Wall Street Journal. There is optimism among investors, the article says, that “conditions are right for active managers’ resurgence to continue, eventually slowing the flow of money out of actively managed funds into lower-cost index-tracking funds, a trend that hounded many of them in recent years.” While investors… Read More

Barron’s: Active Funds Could Make a Comeback

After years of weak performance and a battered reputation, there may be better days ahead for active fund managers, writes Jack Hough in this week’s Barron’s. Investors have been favoring passive funds for years. However, Hough writes, “for tactical investors, the timing might be good for a contrarian move. All that cash pouring into index funds might have flattered the relative performance of the indexes in recent years.” Active funds, Hough says, tend to lag… Read More

Fidelity’s Low-Priced Stock Fund Manager Delivers Market-Beating Returns

Joel Tillinghast, manager of the Fidelity Low-Priced Stock fund, “owns one of today’s best investment records,” according to a profile proceeding a recent interview published in Barron’s. In the 26 years he has managed the fund, it returned an average of 13.7% annually (more than 4% higher than the S&P 500). Tillinghast is restricted by the fund’s charter to buying stocks priced at under $35 per share. He explains: “the original idea was that low-priced stocks… Read More