Standard and Poor's does a lot more than just creating the S&P 500 index. They also provide a vast amount of research, including how active management performs vs. the S&P benchmarks. This scorecard is very interesting, and gives us an academic foundation as to why we choose not to use actively managed investments.
SPIVA: Year-end 2014
Active management is often advertised as not only a way to beat the benchmark in a bull market, but also as a way to cushion the drop in a bear market. The 2011 SPIVA Scorecard looked at the last two bear markets, 2000-2002 & 2008, to research if that holds true. The report's conclusion is very interesting.
SPIVA: Year-end 2011
Another research report produced by Standard and Poor's is their Persistence Scorecard. This report gives an academic look behind the old saying "Past Performance Doesn't Guarantee Future Results". It is published semi-annually, and gives insight into the inability of top performers to stay in that category over the long term. While the report doesn't have a direct link, you can view the scorecard by clicking on the link below. This will pull up the full list of SPIVA reports, including the Persistence Scorecard.
Indices mentioned are unmanaged and cannot be invested into directly. Past performance is not a guarantee of future results"
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