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SPIVA U.S. Mid-Year 2018 How do active managers stack up against their benchmarks over short and long time periods?
BY Aye Soe

SUMMARY

• Despite the market turmoil seen in the first quarter of 2018, the U.S. equity market posted positive returns over the 12-month period ending June 30, 2018, with small-cap stocks leading the pack. The S&P SmallCap 600® reported 20.50%, while the S&P 500® and the S&P MidCap 400® posted 14.37% and 13.50%, respectively.


•  During the one-year period ending June 30, 2018, the overall percentage of all domestic funds outperforming the S&P Composite 1500® increased (42.02%) compared with six months prior (36.57%.


•  Over the one-year period, 63.46% of large-cap managers, 54.18% of mid-cap managers, and 72.88% of small-cap managers underperformed the S&P 500, the S&P MidCap 400, and the S&P SmallCap 600, respectively.


• Despite small-cap equity performing the best, more small-cap managers underperformed the S&P SmallCap 600 over the one-year period compared with results from six months prior.


•  Overall performance of active equity funds relative to their respective benchmarks over the medium term also improved, although the majority still underperformed their benchmarks. Over the five-year period, 76.49% of large-cap managers, 81.74% of mid-cap managers, and 92.90% of small-cap managers lagged their respective benchmarks.


•  Similarly, over the 15-year investment horizon, 92.43% of large-cap managers, 95.13% of mid-cap managers, and 97.70% of small-cap managers failed to outperform on a relative basis.

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