Top 10 Holdings of Our Ultimate Stock-Pickers' Index
Large-cap strategies disappoint on the back of stock market volatility in late 2019.
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.