As expected, Active Managers continue to miss the mark. Click to download the recently released 2016 US and European S&P SPIVA scorecards.
- Almost none have beaten the market over the past 15 years (considered a “complete market cycle”).
- Some 66 percent of large-cap active managers failed to top the S&P 500 in 2016.
- Performance actually got worse over longer time frames, with more than 90 percent missing benchmarks over a 15-year period.
- As a result in the U.S., we are seeing fewer and fewer “stock pickers”, particularly wealth managers and RIAs.
- As BlackRock recently reported, all signs point to implementing systematic models in order to outperform.
It’s an interesting time for Active Managers to say the least. In order to fend off the increasing threat of assets moving into Passive instruments, a systematic use of momentum analytics is highly recommended on a regular basis to ride winners longer while cutting losers to protect profits.
Trendrating’s model and momentum rating system is designed to contribute to more effective risk control. Active managers must start implementing battle-tested models like Trendrating to protect profits and ultimately their existence.