Don’t actively managed funds provide greater protection in down markets?

Answer: There is no consistent evidence to support the notion that active management provides outperformance or greater downside protection in down markets; in fact, the evidence points in the opposite direction. To support this notion, we look back on the 2008 SPIVA® Report. The 2008 Report tracks performance after the worst bear market of our lives. When analyzing the data in this report you will find that the results of active management in 2008 were comparable to every other phase of the market cycle – poor. Given hindsight is 20/20, we now know the very small sub- set of “winners” were random and unpredictable, with many who succeeded in 2008, since subsiding into mediocrity or ceasing to exist today.