Actively managed mid- and small-cap mutual funds continued to lag their relative Standard & Poor's benchmarks during the first half of 2005, while large-cap portfolios finished slightly ahead of them, according to data from Standard & Poor's Indices Versus Active Funds (SPIVA) Scorecard.
The SPIVA data showed that 52.5% of large-cap funds beat the S&P 500 Index in the first half of the year. By contrast, the S&P MidCap 400 Index outperformed 80.4% of mid-cap funds, which means that only about 19.6% of mid-cap portfolios beat their bogeys. Also, the S&P SmallCap 600 Index outpaced 73.1% of small-cap funds during the half.
"Energy, utilities and real estate issues led the market in the first half of 2005," says Rosanne Pane, mutual fund strategist at Standard & Poor's. "Large-cap funds benefited from their overweight in those segments relative to the S&P 500. Cash holdings also helped large-cap active fund managers edge ahead of the S&P 500, which lost -0.81% through the end of June."
The SPIVA report found longer-term results continue to display the supremacy of indices over actively-managed funds. Over the past three years, the S&P 500 has outperformed 74.5% of large-cap funds, the S&P MidCap 400 has beaten 79.1% of mid-cap funds, and the S&P SmallCap 600 did better than 76.8% of small-cap funds.
Over the past five years, the S&P 500 has outperformed 61.8% of large-cap funds, the S&P MidCap 400 outpaced 80.8% of mid-cap funds, and the S&P SmallCap 600 beat 72.7% of small-cap funds.
With regard to index funds, the SPIVA report found that over the last three and five years, asset-weighted returns were slightly higher than equal-weighted returns, based on S&P 500, S&P MidCap 400 and S&P SmallCap 600 indices.
