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January 24, 2005 at 07:00 PM
Jan. 18, 2005 — Benchmark indices outperformed actively managed mutual funds in all but one style box in 2004, according to data from Standard & Poor’s Indices Versus Active Funds (SPIVA) Scorecard.
Active funds lagged their respective benchmarks in eight out of nine investment styles for the year, the exception being large-cap growth. S&P stated that the results are in contrast to 2003, where a majority of actively managed funds outperformed indices in five out of nine style boxes; indices outperformed active funds in three; and one category resulted in a tie.
SPIVA’s data for 2004 revealed that the S&P Composite 1500 Index outperformed 51.4% of actively managed domestic equity funds; the S&P 500 outperformed 61.6% of actively managed large-cap funds, the S&P MidCap 400 outperformed 61.8% of actively managed mid-cap funds; and the S&P SmallCap 600 outperformed 85.0% of actively managed small-cap funds.
“In the fourth quarter of 2004, the S&P 500 Index returned 9.23%, representing 85% of the total return for the year (+10.87%),” says Rosanne Pane, mutual fund strategist at Standard & Poor’s. “The impressive rally after the election favored the growth style, and helped large-cap growth funds outperform their index for the year.”
S&P also noted that longer-term results are consistent with past results. Over the past three years, the S&P Composite 1500 has outperformed 59.9% of all domestic equity funds; the S&P 500 outperformed 68.9% of large-cap funds; the S&P MidCap 400 outperformed 79.1% of mid-cap funds; and the S&P SmallCap 600 outperformed 76.8% of small-cap funds.
