, Columnist
It Pays to Keep Active During a Pandemic Slump
Only 6.6% of small-cap growth managers failed to beat their benchmark in the first four months.
Being a passive investor hasn't worked out so well this year.
Photographer: iStock/Getty Images
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Covid-19 created a great opportunity for active equity managers to show their worth. With correlations extreme during the sell-off, lack of diversification was no longer a problem. Meanwhile, there was exceptional dispersion in returns — meaning that while all stocks fell, some tanked by far more than others. This offered the chance for big eye-catching performance compared to the market, for those who made the right choices.