In the running debate between actively managed funds versus simply investing in a fund that tracks the S&P 500, the scorecard continues to tilt toward the broad stock market index.
According to data from Morningstar Direct, just 18.2% of actively managed funds whose primary prospectus benchmark is the S&P 500 managed to outperform the index in the first half of this year.
That’s on track to be worse than last year, when only 19.8% of actively managed funds beat the S&P 500.
Of course, some years are better for fund managers than others. In 2022, when the Federal Reserve launched its most aggressive rate-hiking cycle in decades and sent the S&P 500 tumbling, 63.3% of active funds outperformed. In 2014, only 14.2% did.
Over the past 10 years, the average share of active funds that beat the S&P 500 was 27%, setting up 2024 to be an especially weak year.
Data from…
