A man looks disgusted (Image: Thinkstock)

The short-term 12-month comeback that actively managed equity funds staged through the end of the first half of 2017 appears to have disappeared six months later according to the latest S&P Dow Jones Indices Versus Active (SPIVA) report.

For all of 2017, only 37% of all domestic actively managed stock funds outperformed the S&P Composite 1500 index compared to roughly 52% in the first half of the year.

(Related: Actively Managed Funds Stage a Short-Term Comeback)

Growth funds, however, were an exception. More than half of all growth funds outperformed their respective indexes in 2017, including over 80% of small-cap and mid-cap funds. The comparison number for large-cap growth funds was 67%.

Those results “highlight the cyclicality of style-box investing, as core managers outperformed 12 months prior with the exception of small caps, while value managers outperformed core and growth 18 months prior,” according to the SPIVA report.

(Related: Top Performing Active Funds Can’t Seem to Stay on Top)

But style-box investing doesn’t explain another finding in the report for small- and large-cap growth fund performance, namely the unusually large gap between the actual performance of those funds versus their respective indexes.

For the one year ended December 31 small-cap and mid-cap growth funds gained 25% each while their respective indexes rose just 15% and 20%, respectively. Those caps can probably be explained by the style shift of these funds, toward large-cap growth, says Ryan Poirier, a senior analyst at S&P Dow Jones Indices and one of the co-authors of the SPIVA report.

Large-cap growth stocks gained almost 31% for the year, about three percentage points more than the S&P 500 growth index.

(Related: Investors Have ‘Given Up’ on Active US Stock Funds: Morningstar)

The performance of actively managed bond funds in 2017 was an even more dramatic story than that of actively managed stock funds.

While more than 96% of long-term government and investment grade corporate bond funds bested their benchmark indexes for the 12 months ended June 30, only 11% of long-term government bonds and 4% of long-term investment grade corporates did so for the 12 months ended December 31, 2017.

That big reversal is not unusual when comparing one-year numbers through the first half to those through the second half, says Poirier, adding that performance of actively managed bond funds is more stable over longer periods of time. But it is also more disappointing.

Less than 6% of long-term government and investment grade corporate bond funds outperformed their indexes over the three years, five years, 10 years and 15 years ended December 31, 2017. Actively managed high yield bond funds fared only slightly better. Less than 10% of those funds outperformed their benchmarks during the same four time periods.

Stocks funds generally performed better than bond funds in relation to their benchmarks. The percentage of equity funds outperforming over three, five, 10 and 15 years ranges from 10% to 25%, depending on the category.

Despite all the findings of the SPIVA report,  investors should not necessarily avoid actively managed funds. They should instead be asking if their funds are average or exceptional, providing the strongest outcomes and keeping them on track to meet their individual goals,  says Steve Deschenes, product management and analytics director at Capital Group, the biggest active asset manager in the U.S. and parent company of American Funds.

According to Morningstar, 10 of 11 American Funds equity offerings beat their benchmarks on  an absolute and risk-adjusted basis over the past 20 years through February 2018. “Investors in the American Funds lineup have been rewarded handsomely the past two decades,”  writes senior analyst Alec Lucas in a recent Morningstar report.

In addition to tracking the performance of actively managed funds, the SPIVA report found that mutual funds overall are disappearing “at a meaningful rate.”  Over the 15 years ended December 31, 2017, 58% of domestic stock funds, 55% of international equity funds and 48% of fixed income funds were merged or liquidated.