With just a handful of shares helping drive both markets and tracker funds higher, it has been easy to feel gloomy about the fate of the humble active fund. Many such vehicles have failed to outperform markets in both good times and bad, all while struggling to compete with passive funds on costs.
Having said that, active funds do still warrant a place in portfolios. If unusual market trends, especially the concentration of returns among a few stocks, start to abate, then they could quickly come back to form. What's more, many active strategies have already delivered significant levels of outperformance over the longer run.
But how to find the winners? Thousands of funds are out there, making it difficult to track and identify the true outperformers over time.