Actively managed mid- and small-cap mutual funds continued to lag their relative Standard & Poor's benchmarks during the first half of 2005, while large-cap portfolios finished slightly ahead of them, according to data from Standard & Poor's Indices Versus Active Funds (SPIVA) Scorecard.
The SPIVA data showed that 52.5% of large-cap funds beat the S&P 500 Index in the first half of the year. By contrast, the S&P MidCap 400 Index outperformed 80.4% of mid-cap funds, which means that only about 19.6% of mid-cap portfolios beat their bogeys. Also, the S&P SmallCap 600 Index outpaced 73.1% of small-cap funds during the half.
"Energy, utilities and real estate issues led the market in the first half of 2005," says Rosanne Pane, mutual fund strategist at Standard & Poor's. "Large-cap funds benefited from their overweight in those segments relative to the S&P 500. Cash holdings also helped large-cap active fund managers edge ahead of the S&P 500, which lost -0.81% through the end of June."
The SPIVA report found longer-term results continue to display the supremacy of indices over actively-managed funds. Over the past three years, the S&P 500 has outperformed 74.5% of large-cap funds, the S&P MidCap 400 has beaten 79.1% of mid-cap funds, and the S&P SmallCap 600 did better than 76.8% of small-cap funds.
Over the past five years, the S&P 500 has outperformed 61.8% of large-cap funds, the S&P MidCap 400 outpaced 80.8% of mid-cap funds, and the S&P SmallCap 600 beat 72.7% of small-cap funds.
With regard to index funds, the SPIVA report found that over the last three and five years, asset-weighted returns were slightly higher than equal-weighted returns, based on S&P 500, S&P MidCap 400 and S&P SmallCap 600 indices.
"The difference in returns among equal- and asset-weighted averages suggests that, among index funds, funds with bigger assets have performed better," says Srikant Dash, index strategist at Standard & Poor's. "Larger funds have smaller expense ratios and greater efficiencies of scale, which explains the difference in returns."
The complete second quarter 2005 SPIVA scorecard is available at .
Percentage of Active Funds Outperformed by Relative Benchmark*
| Fund Category | Comparison Index |
2nd Quarter 2005 |
First Half 2005 |
One-Year |
Three-Year |
Five-Year |
| All Domestic Funds | S&P SuperComposite 1500 |
37.7 |
49.2 |
50.2 |
60.2 |
59.4 |
| All Large-Cap Funds | S&P 500 |
41.3 |
47.5 |
55.2 |
74.5 |
61.8 |
| All Mid-Cap Funds | S&P MidCap 400 |
79.0 |
80.4 |
73.8 |
79.1 |
80.8 |
| All Small-Cap Funds | S&P SmallCap 600 |
63.0 |
73.1 |
77.4 |
76.8 |
72.7 |
| Large-Cap Growth Funds | S&P/BARRA 500 Growth |
11.2 |
49.3 |
37.7 |
67.4 |
62.5 |
| Large-Cap Blend Funds | S&P 500 |
41.6 |
49.2 |
54.7 |
75.3 |
64.4 |
| Large-Cap Value Funds | S&P/BARRA Value |
84.3 |
45.1 |
69.1 |
80.6 |
55.5 |
| Mid-Cap Growth Funds | S&P/BARRA MidCap 400 Growth |
66.2 |
88.0 |
81.0 |
71.2 |
87.7 |
| Mid-Cap Blend Funds | S&P MidCap 400 |
71.2 |
70.7 |
67.3 |
69.8 |
79.2 |
| Mid-Cap Value Funds | S&P/BARRA MidCap 400 Value |
91.5 |
75.4 |
73.0 |
83.7 |
91.4 |
| Small-Cap Growth Funds | S&P/BARRA 600 SmallCap Growth |
49.2 |
83.0 |
90.7 |
95.5 |
91.3 |
| Small-Cap Blend Funds | S&P SmallCap 600 |
66.4 |
71.3 |
73.5 |
79.1 |
79.2 |
| Small-Cap Value Funds | S&P/BARRA 600 SmallCap Value |
74.5 |
60.9 |
68.3 |
42.8 |
60.1 |
| All-Cap Growth Funds | S&P SuperComposite 1500 |
29.8 |
66.0 |
55.7 |
54.0 |
54.2 |
| All-Cap Value Funds | S&P SuperComposite 1500 |
51.5 |
32.8 |
22.8 |
34.4 |
9.1 |
Contact Bob Keane with questions or comments at: .
