After suffering stunning defeats across the board in 2008, equity fund portfolio managers are showing their mettle and proving their worth so far this year, with the average actively managed fund beating the S&P 500 by 4.85 percentage points, The Boston Globe reports.
The average equity fund rose 15.82% through July, whereas the S&P 500 returned 10.97% over the same period.
As The Globe put it, “living breathing fund managers take a lot of guff as inefficient and unpredictable competitors of unmanned investment vehicles that track market indexes with the cool assistance of computers. But actively managed stock funds are the big winners so far this year.”
In fact, the margin is the widest since 1978. Since 1926, equity funds have only exceeded the January through July 4.85% run a total of three times.
That is giving large fund houses reason to celebrate; nine of the 10 largest diversified stock funds at Fidelity are beating the index. Ten of the 14 domestic stock funds at MFS Investment Management are in that league, and all of the biggest stock funds at Putnam Investments are beating the market.
After the devastation the market took to investors’ portfolios—and confidence—in 2008, the returns could not come at a better time.
Analyzing how fund managers have been able to deliver such strong returns, it appears that it is due to the fact that so many various sectors are doing so well, including small-caps, mid-caps, technology, energy and finance.