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Opinion
Nir Kaissar

Active Managers Are on a Winning Streak. That Won’t Last.

Stock pickers are beating the S&P 500 in droves, but it’s a mistake to assume their success will persist.

Peter Lynch’s successful run at Fidelity’s Magellan Fund was due more to investing style and timing than stock picking.

Peter Lynch’s successful run at Fidelity’s Magellan Fund was due more to investing style and timing than stock picking.

Photographer: Michael Springer/Bloomberg

Stock pickers are beating the market in unusually large numbers this year, raising the age-old question about whether their success can be attributed more to luck or skill.   

Nearly 70% of the roughly 2,850 actively managed US stock mutual funds with the stated goal of beating the S&P 500 Index have done so this year through last week. That’s a vast improvement from last year, when just 15% of US large-cap stock pickers beat the market, according to S&P’s latest SPIVA report tracking the performance of active managers. It’s also much higher than normal. On average, roughly 35% of managers have outpaced the S&P 500 in any calendar year, based on annual results back to 2007.