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Investing Specialists

Top 10 Holdings of Our Ultimate Stock-Pickers' Index

Large-cap strategies disappoint on the back of stock market volatility in late 2019.

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Fund investors 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 June 2019, the index group noted that 78.52% 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 measly 8.26% of large-cap core managers have outperformed their index over the past five years versus 15.26% of large-cap value managers and 34.20% of large-cap growth managers outperforming their respective benchmarks over the same time period.

Even though five-year results have been poor for active management, over 30% of large-cap growth funds have still managed to outperform the S&P 500 benchmark. We saw particularly disappointing performance in the large-cap core category, which underperformed compared with 2018. The value strategy saw the largest decline in performance this year, leading to a decline in overall large-cap fund performance. Morningstar's own large-cap index has posted year-to-date returns of 25.45%. 

Nupur Balain has a position in the following securities mentioned above: GILD. Find out about Morningstar’s editorial policies.