Faced with market rough patch, stock pickers fail to shine

Growth managers fared the worst, with only 13% beating benchmark for October

Nov 2, 2018 @ 11:42 am

By Bloomberg News

Stock pickers have been promising for years that once the equity market hit a rough patch, they would have a chance to prove their worth. Maybe not.

Stocks had their worst month in seven years in October and less than half, or 42%, of actively managed mutual funds that buy large-cap U.S. equities beat the S&P 500 Index, according to data compiled by Bloomberg.

Growth managers — who tend to own some of the most popular technology companies — fared the worst, with only 13% beating the benchmark for the month. Shares of tech stocks took a drubbing during the month.

Value managers did better, with 67% outperforming. They typically invest in financial and health-care stocks.

The numbers were based on results from 682 funds tracked by Bloomberg.

(More: Stocks are doing OK. Asset managers' stocks? Not so much)

Early results suggest it wasn't a great month for equity hedge funds either. According to an Oct. 30 report from Morgan Stanley, American equity hedge funds lost 7.2% for the month. That compares to a decline of 6.8% for the S&P 500, including dividends.


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