Focus Advisory

There Are Opportunities Everywhere - Barron's Interview

As an active manager, I love to hear the story of how 70% (or greater) of mutual funds underperform their respective indexes... It means 30% outperformed!
If you're smart enough to type morningstar.com into your browser, you should have the mental capacity to find a few of the 30% of manangers who always beat the indexes.
Diversification is a hedge against ignorance, which makes index investing the height of stupidity.

Regards


On May 03 07:04 PM berated wrote:

> Interesting. I'd like to hear the author's perspective on the following
> recent research showing active managers did much worse than index
> funds:
>
> seekingalpha.com/artic...
>
>
> From the linked article:
>
> "More than 70% of all actively managed U.S. equity mutual funds trailed
> their benchmarks for the five years ending 2008, according to the
> new Standard & Poor's Index Versus Active Fund Scorecard (seekingalpha.com/symbo...).
>
>
> "The new report shows that 71.9% of actively managed large-cap funds
> trailed the S&P 500; 75.9% of actively managed mid-cap funds
> trailed the S&P MidCap 400; and a stunning 85.5% of actively
> managed small-cap funds trailed the S&P SmallCap 600.
>
> S&P says the results were consistent with the previous five-year
> cycle, from 1999 to 2003.
>
> The belief that bear markets strongly favor active management is
> a myth," said Srikant Dash, global head of Research & Design
> at Standard & Poor's, in a statement. "A majority of active funds
> in each of the nine domestic equity style boxes were outperformed
> by indices during the down markets of 2008. The bear market of 2000
> to 2002 showed similar outcomes."