Whether it’s the best of times or the worst for
stocks, mutual fund managers still find that beating
the market is a tough slog.
The stock market got
off to a roaring start this
year, and S&P 500 index
funds enjoyed their best
quarter in nearly a decade.
But the majority of fund
managers lagged their
respective indexes,
according to Jefferies.
Many were stung by
owning less in utility and
real-estate stocks than the
indexes, and those areas
of the market shot higher
as worries about rising
interest rates receded.
It’s not a new phenomenon. Over the last 20
years, the majority of fund managers beat their
index in just four years.
Some areas have seen
more success than others.
The majority of small-cap
growth fund managers
have beaten their indexes
in each of the last two
quarters, for example.
Researchers have also
found that funds with low
expenses tend to be
better long-term performers
because they have a
lower hurdle to jump to
match the returns of index
funds, which generally
have low fees.