US Active Funds Survive February Correction

Nearly 60% of active US stock funds beat their indices during the recent global market selloff, but concerns remain

Jeffrey Ptak 1 March, 2018 | 2:02PM

Wall Street traders

Supporters of actively managed equity funds argue that when stock markets start to sell off, as they did in early February, then these funds really come into their own.

The theory goes that the stock indices must own everything whether it's poor quality, overvalued, or otherwise. That works when stocks are rising. But it's trouble when markets are down and investors lose their nerve. It's then, they argue, that active management proves its mettle, by owning stocks outside the index, deviating from the index's weightings, and hoarding cash.

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Jeffrey Ptak  Head of Manager Research

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