Indexes Beat Active Funds Again in S&P Study

The Wall Street bullies continue to make money with actively managed mutual funds. This cost will have a negative result in your savings. Please do not empower Wall Street, do  employ a prudent strategy. There are really only three simple rules of investing own equities, globally diversify and rebalance. If you remain disciplined to this strategy you will succeed.

Forbes.com Panel
Forbes.com Panel (Photo credit: rexhammock)

The study looks at one-year, three-year and five-year time periods. One-year figures can fluctuate significantly and can favor either active funds or benchmarks. However, over longer-term periods the trend of a large percentage of managers failing to outperform their benchmarks remains consistent.Within the U.S. equity space, over the last five years active equity managers in all the categories failed to outperform the corresponding benchmarks with the exception of large-cap value. More than 65 percent of the large-cap active managers lagged behind the S&P 500®, more than 81 percent of mid-cap funds were outperformed by the S&P MidCap 400® and over 77 percent of the small-cap funds were outperformed by the S&P SmallCap 600®, according to the study.

The wall Street bullies want you to believe they can increase your return and reduce or eliminate risk. This is totally untrue.

Please comment or call to discuss how this affects you and your financial future.

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