active management

Equity Mutual Funds’ “Active Share”

Here’s a remarkable initiative from the U.K., which you should not expect to see replicated here in the U.S., despite its significant value to investors. Neptune Investment Management, an active equity fund manager in the U.K., has announced that it will publish the “active share” if each of the funds it manages. What does this mean? Well, a fund’s active share is a measure of the extent to which the stocks in its portfolio differ from those comprising the index against which it should be benchmarked. For example, a large-cap U.S. equity fund might reasonably be benchmarked against the S&P […]

Another Bad Year For Active Managers

From the Financial Times (11/11/2014): “Fewer fund managers are beating the market this year than at any time in over a decade, piling further misery on a profession that faces increasing investor scepticism.” Among actively-managed U.S. large-cap equity funds, “Only 17.7 per cent are beating the Russell 1000 index of large-cap stocks so far this year. That compares with 40.5 per cent for 2013 as a whole.” Since 2003, “there has only been one year–2007–when a majority of active managers beat the market.” Every year, of course, there’s some convincing new reason why the “irrational”market once again stumped the managers. […]

Happy Birthday SPY!

Happy Birthday Spidy! Today is the 20th anniversary of SPY (SPDR S&P 500 exchange-traded fund), the very first ETF, launched by State Street Global Advisors on January 29,1993 with $6.5 million in assets. Designed to track the S&P 500 index, but trade on the stock exchange like any other  stock, it now has $127 billion in assets and has become the most highly traded equity security on the planet, with daily turnover in excess of 140 million shares. With an average annual return of 8.3%, SPY has, of course, outperformed the average large-cap U.S. stock fund and, unlike the 158 […]