Active Managers Could Have Best Year Since 2009

In 2009, 52% of funds exceeded their benchmark indexes over the full year. The S&P 500 rose 26% that year.

“Declining markets make active management skills all the more valuable, and our report shows that a significant minority of active managers were able to outperform in several categories,” according to S&PDJI.

Since 2017, both large-cap U.S. equity dispersion and volatility have been trending higher, with dispersion currently on pace to have its highest average annual reading since 2009, “which is perhaps not coincidentally the last time we saw this level of outperformance for large-cap domestic equity funds,” S&PDJI wrote. “Higher dispersion implies a greater possibility of generating above-average performance through judicious stock selection.”

While $7.1 trillion was indexed to the S&P 500 in passively managed funds at the end of 2021, $8.5 trillion was benchmarked to the index in active funds during the same period.

“One of the key takeaways from the latest SPIVA data was the active managers can outperform in volatile markets, but it helps even more when the fees are relatively low compared to fund peers. Increasingly, asset managers have offered competitively priced active ETFs,” said Todd Rosenbluth, head of research at VettaFi.

As part of its lineup of active exchange traded funds, T. Rowe Price offers a suite of actively managed equity ETFs, including the T. Rowe Price Blue Chip Growth ETF (TCHP C+), the T. Rowe Price Dividend Growth ETF (TDVG B), the T. Rowe Price Equity Income ETF (TEQI B), the T. Rowe Price Growth Stock ETF (TGRW C), and the T. Rowe Price US Equity Research ETF (TSPA C).

T. Rowe Price has been in the investing business for over 80 years through conducting field research firsthand with companies, utilizing risk management, and employing a bevy of experienced portfolio managers carrying an average of 22 years of experience.

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