High fees and weak manager persistence both point to index-based strategies as a potentially smart way for many investors to access mid caps’ positive attributes and returns. When it comes to identifying the best vehicle for implementing an index-based strategy, ETFs offer a distinct set of potential benefits, including:
1Morningstar as of November 30, 2020. The analysis is based on the funds within the US Fund Mid Cap Category within Morningstar that have a five-year track record. At the end of November 2020, the current number of active funds was 309.
226% of the US-registered mutual fund and ETFs within the US Large, Mid, and Small Morningstar Category have outperformed their prospectus benchmark in the last year as of November 30, 2020, per Morningstar data and calculations by SPDR ETF Research. Past performance is not a reliable indicator of future performance.
SPIVA, or Standard & Poor’s Index Versus Active
A twice-a-year report that compares returns of indexes with related active strategies in both equities and fixed income. The SPIVA data generally show that, on a rolling 12-month basis, roughly two-thirds of active managers do not outperform the indexes they benchmark against. Moreover, the SPIVA report generally shows that the percentage of active managers who fail to beat their benchmarks generally increases over time.
Investing involves risk including the risk of loss of principal.
This communication is not intended to be an investment recommendation or investment advice and should not be relied upon as such.
Equity securities may fluctuate in value in response to the activities of individual companies and general market and economic conditions.
Investments in mid-sized companies may involve greater risks than those in larger, better known companies, but may be less volatile than investments in smaller companies.
Index returns are unmanaged and do not reflect the deduction of any fees or expenses. Index returns reflect capital gains and losses, income and the reinvestment of dividends. You cannot invest directly in an index.