The second quarter was not only an exceptionally strong one for U.S. stocks but also an especially strong quarter for investors of actively managed equity funds.
According to a new Dalbar study that focuses on investor behavior rather than market or fund returns, the average active equity fund investor outperformed the average equity index fund investor by 223 basis points in the second quarter — gaining 20.97% versus 18.74%.
The S&P 500 ended the second quarter with a 20% gain, its biggest quarterly percentage jump since the fourth quarter of 1998.
The average active equity fund investor also withdrew less on a monthly basis in the second quarter than the average equity index fund investor. In addition, active equity funds in April experienced greater net inflows versus outflows as a percentage of total assets than passive funds for the first time since April 2012.
A buy-and-hold strategy proved to be the best approach for equity investors during the first half. According to the Dalbar study, a hypothetical $100,000 equity portfolio lost $3,081 during the first half of the year, compared to a $5,028 loss for a comparable portfolio owned by the average investor.