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Investing Specialists

Top 10 Holdings of Our Ultimate Stock-Pickers' Index

Large-cap value strategies shine after equity market shock in late 2018.

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Every fund investor would like to see the manager of the actively managed funds that they own beat the market every year, but they've been left wanting for well over a decade. The lack of consistent outperformance on the part of 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-year period ending in December 2018, the index group noted that 82.14% of large-cap managers have lagged the S&P 500. The results over this five-year period have been similar across all investing styles. A paltry 7.65% of large-cap core managers have outperformed their index over the past five years versus 20.92% of large-cap value managers and 12.5% of large-cap growth managers outperforming their respective benchmarks over the same time period.

While five-year results have been poor for active management, there are some recent bright spots, particularly in large-cap value. Large-cap growth funds underperformed their index during the second half of 2018, which included a massive sell-off in December and November. Morningstar's own large-cap core (5.48%), large-cap growth (6.07%), and large-cap value (6.12%) one-year index returns (as of June 15, 2019) reveal that value stocks are starting to pick up to carry momentum into 2019 as active management outperformed the S&P 500 Value index.

The Morningstar Ultimate Stock-Pickers Team does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.