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In 2023, 60% of active large-cap U.S. equity funds underperformed the S&P 500, marking a significant trend in active management. Over the last two decades, only 10% of actively-managed equity funds have outperformed the index, with less than 7% achieving this in the past decade. Retail investors have also struggled, with an average year-to-date return of just 3.7%, compared to the S&P 500's gain of 24%. This trend of underperformance is set to continue, as investors are on track for their fourth consecutive year of lagging behind the benchmark. Additionally, the Russell 2000 index is poised to record its fourth consecutive year of underperformance against the S&P 500, a rare occurrence since it has only happened once before since its inception.
1/2 The Russell 2000 is up 42% over the last year but basically flat (+1.0%) over the last 3 years. Both are statistically unusual returns, one standard deviation to the upside and downside, respectively...
The Russell 2000 is on track to record its fourth consecutive year underperforming the S&P 500. Since its inception, streaks have reached four years only once. It underperformed again in 1998, then went on a wicked relative rebound over the following decade. We can see a… https://t.co/w5dvck091X
Been making the point that the one year Sharpe Ratio on the SPX is off the charts... Two comparable periods... Early 2021 when the SPX was up 75% on a YoY basis from the depths of the Covid crash. And also very early 2018 pre the XIV event when the SPX was up 25% on a sub 7… https://t.co/oUbKOcPhwD
