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.
"The difference in returns among equal- and asset-weighted averages suggests that, among index funds, funds with bigger assets have performed better," says Srikant Dash, index strategist at Standard & Poor's. "Larger funds have smaller expense ratios and greater efficiencies of scale, which explains the difference in returns."
The complete second quarter 2005 SPIVA scorecard is available at .
Percentage of Active Funds Outperformed by Relative Benchmark*
| Fund Category | Comparison Index | 2nd Quarter 2005 | First Half 2005 | One-Year | Three-Year | Five-Year |
| All Domestic Funds | S&P SuperComposite 1500 | 37.7 | 49.2 | 50.2 | 60.2 | 59.4 |
| All Large-Cap Funds | S&P 500 | 41.3 | 47.5 | 55.2 | 74.5 | 61.8 |
| All Mid-Cap Funds | S&P MidCap 400 | 79.0 | 80.4 | 73.8 | 79.1 | 80.8 |
| All Small-Cap Funds | S&P SmallCap 600 | 63.0 | 73.1 | 77.4 | 76.8 | 72.7 |
| Large-Cap Growth Funds | S&P/BARRA 500 Growth | 11.2 | 49.3 | 37.7 | 67.4 | 62.5 |
| Large-Cap Blend Funds | S&P 500 | 41.6 | 49.2 | 54.7 | 75.3 | 64.4 |
| Large-Cap Value Funds | S&P/BARRA Value | 84.3 | 45.1 | 69.1 | 80.6 | 55.5 |
| Mid-Cap Growth Funds | S&P/BARRA MidCap 400 Growth | 66.2 | 88.0 | 81.0 | 71.2 | 87.7 |
| Mid-Cap Blend Funds | S&P MidCap 400 | 71.2 | 70.7 | 67.3 | 69.8 | 79.2 |
| Mid-Cap Value Funds | S&P/BARRA MidCap 400 Value | 91.5 | 75.4 | 73.0 | 83.7 | 91.4 |
| Small-Cap Growth Funds | S&P/BARRA 600 SmallCap Growth | 49.2 | 83.0 | 90.7 | 95.5 | 91.3 |
| Small-Cap Blend Funds | S&P SmallCap 600 | 66.4 | 71.3 | 73.5 | 79.1 | 79.2 |
| Small-Cap Value Funds | S&P/BARRA 600 SmallCap Value | 74.5 | 60.9 | 68.3 | 42.8 | 60.1 |
| All-Cap Growth Funds | S&P SuperComposite 1500 | 29.8 | 66.0 | 55.7 | 54.0 | 54.2 |
| All-Cap Value Funds | S&P SuperComposite 1500 | 51.5 | 32.8 | 22.8 | 34.4 | 9.1 |
Contact Bob Keane with questions or comments at: .
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.