Using the S&P Indices Versus Active Funds Scorecard (SPIVA), which provides quarterly performance data for domestic equity mutual funds benchmarked against S&P benchmarks, S&P determined that the S&P 500, MidCap 400, and SmallCap 600 all outperformed their respective managed funds. For the third quarter, the S& P 500 beat 58.56% of large-cap funds, the S&P MidCap 400 outperformed 58.01% of mid-cap funds, and the S&P SmallCap 600 outreturned 69.50% of small-cap funds.
For the first nine months of 2004, results were similar. The S&P 500 beat 62.6% of large-cap funds, while the S&P MidCap 400 beat 57.7% of related funds and the S&P SmallCap 400 outpaced 84.4% of small-cap funds. This was in stark contrast to the first nine months of last year, when actively managed funds outpaced the S&P indices in six investment styles.
Three-year running totals also reflect the same results seen in the third quarter of 2004, with indices beating their respective actively managed accounts in almost every style and size.
This doesn’t mean the stock market is moving, however. Mutual fund returns have been only slightly more than 1% in 2004, according to the release. Market returns have been subdued compared to years past, with investors concerned about the upcoming election, as well as economic trends and geopolitical turmoil.