The company's S-1 lays the groundwork for what is widely expected to be one of the largest initial public offerings of the year, second only to Uber's IPO in May. It's also...Technologyread more
Fraud investigator Harry Markopolos' accusations extended beyond GE's management to actuaries, auditors and analysts who he claims overlooked billions in liabilities.Marketsread more
Trump's tweet comes a day after Apple put out a press release describing the money it spends on U.S.-based suppliers and vendors.Technologyread more
CNBC combed through Wall Street research to see which stocks are still a buy after their earnings reports.Marketsread more
President Donald Trump held a call on Wednesday with the CEOs of three major U.S. banks, according to people with knowledge of the situation.Marketsread more
Despite aggressive strides, Waymo needs one thing before their self-driving cars become a seriously useful transportation system: people. We talked to the ones closest to it.Technologyread more
Scientists say the smoke plumes, filled with megatons of tiny, harmful particles, could travel to other areas of the world and cause serious respiratory problems for people.Weather & Natural Disastersread more
Some Weight Watchers loyalists applaud Kurbo by WW. But nutritionists worry Kurbo promotes an unhealthy relationship with food during an especially impressionable time.Health and Scienceread more
Benefits from what President Trump called "the biggest reform of all time" to the tax code have dwindled to a faint breeze just 20 months after its enactment, writes John...Politicsread more
Epstein, 66, was found in his cell in Manhattan federal lockup Saturday morning and transferred to a nearby hospital, where he was subsequently pronounced dead.Politicsread more
Air travelers faced delays at U.S. airports on Friday afternoon after a computer issue snarled processing of international arrivals.Airlinesread more
Active managers, after years of suffering through a low-volatility stock market that has made their lives miserable, are finally showing signs of life.
The first half of 2017 saw 54 percent of large-cap managers beat their benchmarks. That number may not sound remarkable on its face but is actually the first time a majority achieved the feat in the first half since 2009, when Bank of America Merrill Lynch first started tracking the performance. Sixty percent beat in the second quarter, the best since the first quarter of 2009.
Low volatility has long been the enemy of stock pickers, and that story hasn't changed much this year. The most conventional measure, the CBOE Volatility Index, has been mired around multiyear lows for much of 2017. However, several other factors have colluded to make life easier.
For one, fund managers have simply gotten better at sector selection.
They set a record for overweight positions in the red-hot tech sector, which gained 17.2 percent in the first half. They also had higher than normal allocations to discretionary and health care, the second- and third-best sectors. Managers are holding record-low positions in weak-performing staples, utilities and telecom shares, according to BofAML.
Another factor has been correlations, or the tendency stocks have had to move up and down together during the eight-year bull market run. High correlations make it more difficult for active managers to find price discrepancies needed for outperformance, and correlations have come down this year.
Finally, style has helped — 71 percent of value managers and 64 percent of growth managers have outperformed. Core managers, who blend both styles, saw just a 36 percent outperform rate.
One blip in the active outperformance has come from small caps, which have seen just 42 percent of managers outperform. June was a particularly difficult month, with an outperform rate of just 18 percent.
The ability of active fund managers to beat basic benchmarks like the various S&P and Russell indexes is important at a time when investors increasingly are turning to ETF-based passive strategies.
Exchange-traded funds track the indexes themselves and generally come with significantly lower fees. Even while active managers' performance improved this year, investors piled a fresh $245 billion of new money into ETFs during the first half, bringing total assets to just under $3 trillion, according to State Street Global Advisors and XTF.
Investors have pushed $702.9 billion into passive strategies over the past 12 months while pulling $278.7 billion from active funds over the past 12 months, according to Morningstar data through May. Included in that total is $308.3 billion of inflows to passive stock funds and $263.6 billion in outflows to active equity funds.
WATCH: Active? Passive? One pro says investors will be doing a little of both.