Most outperforming funds don’t stay on top, says S&P

S&P Dow Jones’ well-known SPIVA reports consistently suggest few active managers outperform the index. The index-provider’s recently released “persistence scorecard” shows the best-performing mutual funds have a hard time keeping their rank.

Read: How should you measure investment performance?

“Very few funds can consistently stay at the top,” the study says. “Out of the 687 funds that were in the top quartile as of March 2012, only 3.78% managed to stay there by the end of March 2014. Further, 1.90% of the large-cap funds, 3.16% of the mid-cap funds and 4.11% of the small-cap funds remain in the top quartile.”

The report also shows that “for the three years ended March 2014, 14.10% of large-cap funds, 16.32% of mid-cap funds and 25.00% of small-cap funds maintained a top-half ranking over three consecutive 12-month periods. Random expectations would suggest a rate of 25%.”

Read more here.

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Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.