Actively managed funds beat our their indexed brethren in the first quarter of 2003, according to Standard & Poor’s. In the Standard & Poor's Indices Versus Active Funds Scorecard (SPIVA), analysts found that actively managed mutual funds are better equipped to take advantage of the economic recovery.

"The actively managed funds can be better positioned because in a very volatile market like this, a lot of active managers can take profits in turning positions, such as the consumer discretionary sector," said Phil Edwards, director of fund research.

Edwards also named technology and consumer staples as sectors where fund managers can reap profits, but warned that telecommunications is "still a wasteland for most people."

Among large-cap funds, notorious for lagging behind the S&P 500 index, 49.3% beat the index in the first quarter of this year. While this does not demonstrate stellar performance in and of itself, it is a significant improvement. Over the last five years, the S&P 500 index has outperformed 60.2% of large cap funds.

Actively managed mid and small cap funds, however, have done significantly better than their respective indexes. Respectively, 72.9% and 73.4% outdid the S&P MidCap 400 and S&P SmallCap 600.

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