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Mid-Year Index vs. Active Update

Crews Bank & Trust Wealth Management Services Oct 6, 2022
chart looks at Equity Funds underperforming their benchmarks

Contents

Twice a year, S&P Dow Jones updates their SPIVA (S&P Indices Versus Active) report.

Not only do US active managers underperform 92% of the time over 10 years on an absolute basis, but underperformance goes up to 97% when you factor in risk. This means that you only have a 3% chance to beat the market using active funds.

Yes, year to date, active management did a little bit better with only 52% underperforming, but even with all the turmoil this year, it’s still roughly a coin toss. With underperformance quickly increasing to 90% after three years for risk adjusted returns, it’s not worth the risk.

Choose your horse wisely.
Chart of the Day

About the Author

Crews Bank & Trust Wealth Management Services
Crews Bank & Trust Wealth Management Services

Experienced professionals from our wealth management services team can help you achieve a bright financial future through investment strategies tailored to you. We’ll show you all of the options available and help you choose the ones best suited to you. We’ll provide high-quality, personal service as we work toward your goals together. Our Portfolio Managers do not receive commissions on trades; our recommendations of investments are based solely on your best interests.

Investments are not a deposit or other obligation of, or guaranteed by, the bank, are not FDIC insured, not insured by any federal government agency, and are subject to investment risks, including possible loss of principal.

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