Risk, returns & timeframes illustration
1 min read
June 9, 2022
by

From YOLO to OH-NO!

Are the mavericks of fund management surpassing passive funds? While the scales may have tipped in managed funds’ favour, there’s been a mighty mauling of some and not everyone thinks it’s pawsome. 🐾
1 min read
June 9, 2022
by

From YOLO to OH-NO!

Are the mavericks of fund management surpassing passive funds? While the scales may have tipped in managed funds’ favour, there’s been a mighty mauling of some and not everyone thinks it’s pawsome. 🐾
1 min read
June 9, 2022
by

From YOLO to OH-NO!

Are the mavericks of fund management surpassing passive funds? While the scales may have tipped in managed funds’ favour, there’s been a mighty mauling of some and not everyone thinks it’s pawsome. 🐾
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Investing in 2022 has felt a lot like taking a pie in the face, lately. 🥧 The big S&P 500 index has fallen 14% and things have deteriorated so much that even Cardi B is asking if we’ve hit a recession yet. Oof! The answer is, not quite. But investing maverick Warren Buffett isn’t waiting around to find out. Buffett has poured US$51 billion into new investments this year through his company Berkshire Hathaway (BRK.A, BRK.B), including into Top Gun producer, Paramount (PARAA). 🛫

The market’s been rich pickings for active stock pickers like Buffett. According to Bloomberg, nearly 70% of actively managed US stock mutual funds that try to outperform the S&P 500 have done so in the first half of this year. That’s a big change from last year, when only 15% were able to beat ‘passive’ investors tracking the S&P 500 Vanguard ETF (VOO), which cruised home with an impressive 27.7% return.

Not all actively managed funds are having fun though. Big New York hedge fund Tiger Global has had their returns mauled by 50% this year. Yep, even they might have to dig deeper into their resilience and strength to defeat evil in the Year of the Tiger. 🐅 While other actively managed funds have also turned from YOLO to ‘OH-NO!’. Like the Advisor Shares Pure Cannabis ETF (YOLO), which has seen their shares smoked, down 48%.

So is passive investing dead? 💀 Unlikely. But investors might need to think longer term. Top Gun Buffett thinks putting money into low-cost ‘passive’ index funds is a good option for most long term investors. In 2017, Buffett famously won a US$1 million bet that passive funds would beat the returns of a group of actively managed hedge funds over a ten year period. A bet that the former hedge fund investor who lost wouldn’t do again. According to Bloomberg, just 17% of US large-cap stock pickers beat the S&P 500 over the 10 years through 2021. That might be just what Cardi B needs. Yolo.

We’re not financial advisors and Hatch news is for your information only. However dazzling our writing, none of it is a recommendation to invest in any of the companies or funds mentioned. If you want support before making any investment decisions, consider seeking financial advice from a licensed provider. We’ve done our best to ensure all information is current when we pushed ‘publish’ on this article. And of course, with investing, your money isn’t guaranteed to grow and there’s always a risk you might lose money.

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