Active funds failed to protect their investors and trackers during the first-half sell-off and are now trailing in the second half. Some argued that active funds would re-emerge as shifting market dynamics meant that stock selection and the ability to deviate from a benchmark would begin to drive performance. There is a widespread belief that because they are not required to track an index, active funds are better suited to protecting investors during market downturns.
Source: FinXL. Based on total return in sterling between 1 Jan and 30 Jun 2022
57.8% of active funds in the Investment Association universe made a lower return than the average passive in their sector during the opening six months of 2022. There are eight sectors were every single active fund failed to beat the average tracker, including IA Sterling High Yield and IA UK Direct Property. 40 of the 57 Investment Association sectors we looked at had more than half of their active members lag behind trackers.
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Source: FinXL. Based on total return in sterling between 1 Jul and 18 Aug 2022
Since 1 July, 55.2% of active funds have made a lower return than their sector's average tracker. But that's not much of an improvement on the 57.8% that underperformed in the first half. There are seven sectors where every active fund has fallen behind in the rally.
read full article https://www.trustnet.com/news/13322844/active-funds-lost-to-passives-in-2022%E2%80%99s-sell-off-and-are-behind-in-the-rally-too
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