Standard & Poor’s Global Research & Design Group provides performance comparisons for actively managed funds versus S&P indices. It’s called SPIVA and it’s published semiannually. We are preparing an in-depth analysis to be published soon, but I will share some important findings at this time.

For the last five (5)  years, ending June 30, 2011:

  • The S&P 500 Index has outperformed 64% of All Large Cap mutual funds;
  • The S&P Midcap 400 Index has outperformed 79% of All Mid Cap mutual funds;
  • The S&P SmallCap 600 Index has outperformed 61% of All Small Cap mutual funds; and
  • The S&P/IFCI Index has outperformed 87% of All Emerging Markets mutual funds.

Have you ever read, “Past performance is not an indication of future results“?  They’re not kidding. The SPIVA report also tracks and measures the consistency of top performing mutual funds.  It is referred to as “Persistence”. Over the five year period, ending March 2011, less than 1 percent of large-cap funds maintained a top-half ranking over five consecutive 12-month periods.

This begs the question, why do so many investors continue to chase returns? Well, the answer lies in a field of study called Behavioral Finance. Both individuals and institutional investors are subject to the influence of behavioral tendencies. We at Alhambra are reaching out to the academic community to learn the latest intelligence on the subject. We will be sharing those insights soon.

The SPIVA results support our founding investment principle. That is, a multiple asset class approach to investing that is similar in nature to techniques employed by major university endowments such as Yale and Harvard. The Alhambra investment philosophy is informed by years of academic research about the interaction of different asset classes and how the combination of risky assets in a portfolio context can reduce the overall risk of the asset pool.  This multiple asset class approach is deeply rooted in Modern Portfolio Theory.


Our weekly Alhambra Investment Report (subscribe here) will be highlighting one of our proprietary portfolios and compare them with well-known, highly rated mutual funds. If you would like to receive a complimentary analysis of your mutual funds, please call your Alhambra representative or contact us at

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