How are Active Managers Beating the Market? By Taking More Risk.

Savita Subramanian’s group at Bank of America Merrill Lynch is out with an update on the state of actively managed mutual funds, noting that “44% of all managers outperformed” the Russell 1000 index of US large caps year to date. “Value managers had the highest hit rate of 77%, while 36% of Growth and 29% of Core managers beat their benchmarks.”

That’s a big jump over the 2014 disaster, thanks to the fact that all three preconditions for active management outperformance are back in place this year.

So how are actively managed funds getting the job done in 2015? Simple, they’re taking more risk than the benchmark.

For example, active managers are dipping into smaller capitalization stocks than the index holds and they’re also buying lower quality companies:

active

Josh here – In addition, the Equity and Quant Strategy group finds active managers currently owning more expensive stocks (on earnings yield and price/book), higher-beta (more volatile) stocks and stocks with lower dividend yields than the overall benchmark.

Whatever it takes?

Source:

What are your neighbors doing? 
Bank of America Merrill Lynch – June 22nd 2015

 

 

What's been said:

Discussions found on the web
  1. light pink wig commented on Nov 28

    … [Trackback]

    […] Find More Information here to that Topic: thereformedbroker.com/2015/06/22/how-are-active-managers-beating-the-market-by-taking-more-risk/ […]

  2. tangerine banking signin commented on Nov 29

    … [Trackback]

    […] Here you can find 71352 additional Information on that Topic: thereformedbroker.com/2015/06/22/how-are-active-managers-beating-the-market-by-taking-more-risk/ […]

  3. bmo mastercard online login commented on Dec 04

    … [Trackback]

    […] There you can find 94258 additional Information to that Topic: thereformedbroker.com/2015/06/22/how-are-active-managers-beating-the-market-by-taking-more-risk/ […]

  4. mơ thấy chim bồ câu đánh con gì commented on Dec 20

    … [Trackback]

    […] Info on that Topic: thereformedbroker.com/2015/06/22/how-are-active-managers-beating-the-market-by-taking-more-risk/ […]

  5. aimbots overwatch commented on Dec 24

    … [Trackback]

    […] Find More on to that Topic: thereformedbroker.com/2015/06/22/how-are-active-managers-beating-the-market-by-taking-more-risk/ […]

  6. Best Place To Buy Guns Online commented on Jan 12

    … [Trackback]

    […] Find More on that Topic: thereformedbroker.com/2015/06/22/how-are-active-managers-beating-the-market-by-taking-more-risk/ […]

  7. scotiabank online banking commented on Jan 14

    … [Trackback]

    […] Information on that Topic: thereformedbroker.com/2015/06/22/how-are-active-managers-beating-the-market-by-taking-more-risk/ […]

  8. cheap wigs commented on Jan 23

    … [Trackback]

    […] Read More Info here on that Topic: thereformedbroker.com/2015/06/22/how-are-active-managers-beating-the-market-by-taking-more-risk/ […]

Read this next.