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How Stockpickers Finally Beat the Index Funds

With less riding on slumping tech stocks such as Amazon, Tesla and Microsoft, many active fund managers finally surpassed their benchmarks in 2022.
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Illustration: Philip Lindeman for Bloomberg Businessweek

For one type of investor, 2022 was the best year in a long time. A large number of active managers of equity mutual funds—the ones who select specific stocks rather than track an index—beat the S&P 500.

Measuring the relative performance of fund managers is trickier than it sounds, so not all the data are in. (Number crunchers have to decide which index each fund can be fairly compared with.) But early indications show that a key group of stockpickers eked out an edge. According to an analysis by advisory company Strategas Securities, 62% of active large-company “core” funds—those that buy a mix of growth and value stocks—beat the market. That’s the highest percentage of active portfolios to notch a win since 2005.