Index and Funds Score Evenly in 1Q06

According to the Standard & Poor’s Indices Versus Active Funds Scorecard (SPIVA), actively managed funds fared better than their benchmarks in the large-cap category, with 52.3% of them outperforming the S&P 500, an S&P press release said.

“So far in 2006 actively managed large-cap funds, which can invest in foreign companies, have benefited from international markets outperforming the U.S. market,” said Rosanne Pane, Mutual Fund Strategist at Standard & Poor’s, in the release. 

The SPIVA Scorecard shows that the S&P MidCap 400 outperformed 51.5% of mid-cap funds during the first quarter, while the S&P SmallCap 600 outperformed 64.2% of small-cap funds.   While a majority of large-, mid-, and small-cap growth funds outperformed their comparable S&P growth indices, their value counterparts underperformed their relative S&P value indices.

The S&P data shows that longer-term results are consistent with past results of index outperformance. Over the past three years, the S&P 500 has outperformed 61.9% of large-cap funds, the S&P MidCap 400 has outperformed 77.4% of mid-cap funds, and the S&P SmallCap 600 has outperformed 75.9% of small-cap funds.  Over the past five years, the S&P 500 has outperformed 67.1% of large-cap funds, the S&P MidCap 400 has outperformed 87.3% of mid-cap funds, and the S&P SmallCap 600 has outperformed 78.7% of small-cap funds.

The SPIVA methodology corrects for survivorship bias. Twenty-seven percent of general equity funds and 29.6% of sector funds have merged or liquidated over the past five years.

The first quarter 2006 SPIVA scorecard can be accessed here .