A Skeptic’s Guide to a Revival in Active Fund Management

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Active managers might look more attractive, but logic of index strategies remains the same
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Active management is beckoning fund investors again.ILLUSTRATION:MARINA MUNN FOR THE WALL STREET JOURNAL
By
JONATHAN BURTON
Updated March 5, 2017 10:44 p.m. ET
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Active mutual-fund managers are enjoying a moment in the sunshine, after a long period of darkness.

Consider that 50% of large-cap blend funds topped the S&P 500 index over the six months through February, and 57% of large-growth funds beat the S&P 500 Growth Index, according to research from Leuthold Group, using data from investment researcher Morningstar. Meanwhile, active has also stood out among small-cap blend funds, where 52% beat the Russell 2000 benchmark.

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Still, an array of experts say investors and advisers who have embraced index funds should be wary of switching sides, despite active management’s current enticing call.

Investors favoring indexed products for the stock portion of their portfolio should keep in mind their good reasons for doing so, these experts say. The majority of mutual-fund managers routinely lag behind their benchmark stock indexes and the corresponding index funds and index-tracking exchange-traded funds they are paid to beat.


https://www.wsj.com/articles/a-skeptics-guide-to-a-revival-in-active-fund-management-1488769681
 
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Having a hard time picking individual stocks? Just hire a professional stock picker. Make sure you get a good one because 85% of them under perform. Picking a stock is hard, there are so many. Picking a manager is easy, there are so many to choose from. See the difference?
 
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