secular bear market

[sgeeeee]

I thought that was a myth...didnt berstein cover that in the four pillars...that actively managed funds in general didnt do better in a bear.  It intuitively makes sense, that an active manager could 'steer out of the skid', but I thought the data said otherwise?

It is.  Look up SPIVA on the internet.  The question is not that straightforward.  There are always some active managed funds that beat indexing over a short enough period of time.  As the time period gets longer, the number of funds that beat the index diminishes.  Standard and Poor's runs a quarterly scorecard to look at managed versus index.  The margin that indexes beat managed funds is reduced in bear markets.  Occasionaly, I believe, you might find a quarter when just over 50% of the active funds beat the index.  But it is rare and it is short lived.

SPIVA: S&P Index Versus Active Funds Scorecard

     

  The Standard & Poor's Index Versus Active (SPIVA) methodology is designed to provide an accurate and objective apples-to-apples comparison of funds’ performance versus their appropriate style indices, correcting for factors that have skewed results in previous index-versus-active analyses in the industry. SPIVA scorecards show both asset-weighted and equal-weighted averages, include survivorship bias correction to account for funds that may have merged or been liquidated during the period under study, and show style consistency for each style group across different time horizons.

The SPIVA Scorecards were developed by a cooperative effort between Standard & Poor’s Quantitative Services, Funds Services and Index Services. Reports released every quarter track index versus fund performance on a quarterly, one-year, three-year and five-year basis.

 

[cute fuzzy bunny]

Thats what I was thinking..there havent been enough bear markets and they dont last long enough to get a clean indicator one way or the other.

Sure does make sense though that an actively managed fund SHOULD beat an index in a down or sideways market. That any of them dont with consistency sure says a lot about active management...

 

[laurence]

So how are funds like the value fund (you pointed me to the viper VTV) fit into this? Doesn't that get classified as an actively managed fund? And Wellington, Wellesly...VTV has been good to me, others have benefited from the other funds listed (I hold Wellington, too). I guess I'm curious, we fart spit in the general direction of active funds but hold them nonetheless.

 

[cute fuzzy bunny]

I do, and those are good funds. Unlike a lot of actively managed funds though, they charge expenses like an index and dont have a lot of high turnover. Think of them as selective indexes...

I think the value viper is drawn from the large cap value index?

 

[Nords]

Doesn't that get classified as an actively managed fund?  And Wellington, Wellesly...VTV has been good to me, others have benefited from the other funds listed (I hold Wellington, too).  I guess I'm curious, we fart spit in the general direction of active funds but hold them nonetheless. 

Don't pray for your health or your family's. Pray for Gus Sauter's...

 

[poyet]

In general, they do.

If one can predict with any degree of certainty about the bear market, the best investment will be cash. Ummm... second thought bear market fund or any fund that shorts the market.

Well, you can do that at very low cost shorting QQQQ or spiders or whatever, knowing that bear markets cannot be traded symetrically as bull are. I mean, you can only be short during falling windows and cannot sustain pullbacks (while being short) whereas you can stay long (if not leveraged) while the market pullbacks when you're long on a bull.

Couple a words before going skiing. I'm getting addicted to this board !
Have a nice day.