This is surprisingly difficult to answer because actively managed mutual funds rarely restrict themselves to securities in the reference index.anonyvestor wrote: ↑Wed Mar 07, 2018 2:43 amWhile I am used to hearing statements declaring how few active funds beat their index (presumably over a year) I am interested in examples of funds which have beat a major index over prolonged intervals.
If the interval is sufficiently brief (e.g. one day,) I imagine nearly 50% of funds would beat the index. But as the interval extends, I would suspect virtually no active funds beat their index.
I am looking for examples of active funds whose returns (after considering costs) have beat a major index for decades. Better yet, funds which have beat a relevant index fund over decades.
What's your best contender?
Here is an example of the difficulty. An international equity fund allocates 90% to a diversified portfolio of developed markets stocks and 10% to a diversified portfolio of emerging market stocks. Should it be benchmarked with a DM index or total int'l index? Either will fit the overall portfolio equally well. In periods where DM beats EM the fund will beat the total intl index, but when EM overperforms, the fund will beat the DM index. There are fund companies that use this strategy and cherry-pick the index to claim overperformance of the fund.