Top 10 Holdings of Our Ultimate Stock-Pickers' Index
Large-cap strategies continue to underperform the market through 2020.
Fund investors would like to see the manager of the actively managed funds they own beat the market every year, but they've been left wanting for well over a decade. The lack of consistent outperformance by large-cap active managers (the main contributors to the Ultimate Stock-Pickers concept) has been well documented by the S&P Indices Versus Active Funds (SPIVA) U.S. Scorecard. For the five years ending June 2020, the index group noted that 77.97% of large-cap managers had lagged the S&P 500. The results over this five-year period have been similar across all investing styles. A measly 6.9% of large-cap core managers have outperformed their index over the past five years versus 19% of large-cap value managers and 38.5% of large-cap growth managers. (We'll note this analysis is performed on an after-fees basis.)
Although five-year results have been lacking for active management, about 38.5% of large-cap growth funds have still managed to outperform the S&P 500 benchmark. We saw a marked improvement in managers' results in the large-cap value category, which overperformed compared with 2019. Despite the improvement, the value strategy does not remain close to its strong performance posted in 2017 and 2018. Morningstar's large-cap index (MLCP) has posted year-to-date returns of 16.48%.
Malik Ahmed Khan does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.