Tag Archives: passive management
A Stellar 2021 for Indian Equities
Indian equities had a stellar 2021—the S&P BSE SENSEX rose over 23%, outpacing most major emerging markets, though slightly lagging the S&P 500®, which gained 29%. Information Technology and Financials were the top contributors, adding 9% and 6%, respectively, to the performance of the Indian bellwether. Smaller Indian companies did even better than blue chips;…
Active Management: Naughty or Nice?
The history of active investment management is, for the most part, a history of failure and frustration. Most active managers underperform most of the time, and success in one period seems not to predict subsequent success. We have long argued that active underperformance is not coincidental—it happens for identifiable and understandable reasons, and is therefore…
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Dissecting the Performance of Indian Equity Active Funds in 2020
The percentage of active funds that underperformed their respective benchmarks in the Indian Equities Large-Cap and Mid-/Small-Cap fund categories over a one-year investment horizon doubled from 2019 to 2020, as seen in the SPIVA® India Year-End Scorecards for 2019 and 2020. The percentage of Large-Cap active funds that underperformed the S&P BSE 100 over a…
Woodstock for Capitalists
Berkshire Hathaway is scheduled to hold its annual shareholders’ meeting this Saturday, May 1. This is the second consecutive year in which the meeting will be virtual; in 2019, attendance was nearly 40,000, which makes social distancing somewhat difficult. We noted two years ago that Berkshire’s investment performance, though formidable over the long run, had…
- Categories Equities, S&P 500 & DJIA
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Risk-Adjusted SPIVA Year-End 2020 Scorecard: No Evidence to Support Superior Risk Management Skills of Active Managers
Modern Portfolio Theory tells us that higher returns tend to be associated with higher risk. Active managers tend to boast about their risk management skills and claim that they can generate higher returns than passive funds on a risk-adjusted basis. The Risk-Adjusted SPIVA® Scorecard assesses the risk-adjusted returns of actively managed funds against their benchmarks…
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Highlights of the SPIVA Canada Year-End 2020 Scorecard
Although 2020 was a year that offered ample opportunities for stock pickers to shine, most Canadian active fund managers in five of the seven categories tracked by the SPIVA® Canada Year-End 2020 Scorecard underperformed their benchmarks over the past year. The Canadian equity market was not spared from the COVID-19 shock in 2020. Nevertheless, major…
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SPIVA and Style
Last week S&P Dow Jones Indices released its SPIVA® U.S. Year-End 2020 Scorecard. As has been the case for 17 of the past 20 calendar years, the majority of active large-cap managers underperformed the S&P 500®. Performance was better for mid- and small-cap managers, as Exhibit 1 shows. What caused the advantage for smaller-capitalization strategies?…
- Categories Equities, S&P 500 & DJIA
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SPIVA U.S. Year-End 2020 Scorecard: Passive Continued Its Winning Streak
In a year that brought a pandemic, volatility, and policy stimulus, asset prices rose nearly across the board. However, positive absolute returns did not necessarily translate into success for active managers relative to their benchmarks. According to the SPIVA® U.S. Year-End 2020 Scorecard, most active fund managers in the U.S. underperformed their benchmarks over the…
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Celebrating 64 Years of the S&P 500
The S&P 500® was launched on March 4, 1957, and so yesterday marked its 64th birthday. To celebrate this milestone, a number of my colleagues and I recently appeared on our Index Investment Strategy team’s weekly call (sign up for the daily dashboard to receive the invite). If you couldn’t make it, here are a…
- Categories Equities, S&P 500 & DJIA
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Man Bites Dog: The Year for Active Management?
For at least five years, we’ve noticed that, despite historical performance, active managers regularly proclaim that this year will at last be the time when active management shows its value. I suspect that most advocates of indexing derive at least some guilty pleasure from observing this ritual. (I know I do.) So, we want to…
- Categories Equities, S&P 500 & DJIA
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