Active Managers Getting Trounced.

Josh Brown over at the "Reformed Broker" was out with this chart last week showing the abysmal performance of large cap mutual funds versus they S&P 500 this year.  Here's the chart that is also via the Wall Street Journal's "Moneybeat" blog.  

Notice in the chart that only two years out of the last twelve have more than half of these active managers beat the S&P 500.  That's less than 16% of the years listed above by my math.  The real expenses of most large cap mutual funds average in the 2-3% range.  The S&P 500 ETF {SPY} has an expense ratio of 0.09% and it's up nearly 9% this year.  One other thing about the chart, take a look at the year 2008.  The market lost something like 33% that year.  Only 34% of these large cap managers did better than the market so that has to mean that 66% did just as poorly or worse that year!

This just chronicles the problems at large cap mutual funds. The active money management crowd I know has also been having a hard time of it in 2014.  Brown notes in the article that the average hedge fund is up 2% for the year.  This kind of investing is becoming a hard sell in my book.

The Reformed Broker.com: 2015 Will Be the Year of the Stockpicker!

Moneybeat.com Why Stock Pickers Have Suffered a Really Bad Year.

*Long ETFs related to the S&P 500 in client accounts although positions can change at any time.  Long certain large cap mutual funds as legacy positions in client accounts.