How have the active largecap funds done compared to their passive counterparts, passive largecap index funds in 2022?
Have a look at the data below. And just have a look at the large share of passive index funds in the top-25 funds in largecap category (green ones are passive):
While every year there will be a few active largecap funds beating the index funds, there will always be a bigger number of actives not beating the index. With index funds (for largecap exposure), you will never be the worst, even if you are not the best. And that is good enough.
Should I shift from active Large Cap funds to Index funds?
There is a case for doing that. At least for largecaps. Data is constantly pointing to that. I wrote this (Shift to index funds for largecap now) a couple of years back and it’s still applicable.
For non-largecap exposure, I still think active is a better route. Pure passive fans who want to go 100% passive across market caps may differ. But that’s fine. Everyone is right 🙂🙏
For completeness, here is the full set of data for largecaps (excluding ETFs, FOFs, and Next50 funds):