Active funds are getting some bad press after Standard & Poor's "Index Versus Active" data series made the rounds in various financial publications, including, not surprisingly, IndexUniverse. Olly Ludwig writes that the data showed that around 60 percent to two-thirds of passive funds outperformed their active counterparts in most survey periods.

Ludwig also referred to Rick Ferri's recent white paper on the topic and pointed out that active funds may often look better than they do because of survivorship bias.

If you have a fund that qualified as "active management in drag" you might want to know that Barrons' Brendan Conway and Research Affiliates' Rob Arnott, in an interview with IndexUniverse's Olly Ludwig, gave them some less than rave reviews. Conway writes about how funds that present themselves as plain vanilla index-tracking ETFs are actually quite different. Conway is referring to "fundamental indexing," which is turning certain kinds of stocks into rules-based indexes. There is a substantial gap between those indexes and the conventional market-cap indexes.

To read more, click here and here and here. 

Edited by: Casey Quinlan


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