Magazine article American Banker

Independent Advisers Continue to Underperform Market

Magazine article American Banker

Independent Advisers Continue to Underperform Market

Article excerpt

NEW YORK -- Independent investment advisers continued to underperform the market for the 3 months, 6 months, and 12 months ending June 30. As in 1983, the market, as measured by Standard & Poor's 500 common stock index, beat the performance achieved by the average money manager in all three periods.

The portfolio of the average equity money manager declined 2.7% during the second quarter, according to the most recent report compiled by Computer Directions Advisors, the performance measurement firm based in Silver Spring, Md. For the same period, the median fund declined 2.5% and the S&P index was off 2.6%. The report included the performance of 240 investment management firms that filed reports for the second quarter with the Securities and Exchange Commission.

for the year to date, the average manager's portfolio declined 8.9% versus a decline of 5% for the S&P index. The six-month report included 224 managers that filed with the SEC. And for the 12 months, for which 194 managers filed, the average manager's portfolio declined 11.6% versus the decline of 4.8% for the S&P.

These equity firms did slightly worse than the mutual funds for the quarter and for the first half. The average mutual fund fell 2.5% for the quarter and 8.8% for the six months, according to Lipper Analytical Securities, the mutual fund measurement firm in New York. But for the 12 months, the average equity fund declined 12.4%.

Despite the overall dismal performance of these independent firms, there were a number of managers that have recorded stellar performances during the stock market's decline, which began in June 1983. …

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