In the ongoing debate between actively managed funds and simply investing in a fund that tracks the S&P 500, the score continues to lean toward the broader stock index.
According to data from Morningstar Direct, only 18.2% of actively managed funds whose main benchmark is the S&P 500 managed to outperform the index in the first half of this year.
That’s on track to be worse than last year, when just 19.8% of actively managed funds outperformed the S&P 500.
Of course, some years are better for fund managers than others. In 2022, when the Federal Reserve launched its most aggressive rate-hiking cycle in decades and sent the S&P 500 into a tailspin, 63.3% of active funds outperformed. In 2014, just 14.2% did.
Over the past 10 years, the average share of active funds that outperformed the S&P 500 was 27%, making 2024 an especially weak year.
Morningstar Direct data also shows that 13.4% of passive funds are outperforming year-to-date. And over the past decade, passive funds have consistently lagged active funds in the proportion of those that have outperformed the S&P 500.
But that’s not surprising given that many passive funds simply seek to track the index and keep expenses lower rather than charge higher fees and hope for higher returns.
To be sure, the vast majority of the S&P 500’s recent gains have come from a handful of tech giants. That leaves index investors vulnerable to a sell-off in a stock like Nvidia. Still, even as Nvidia has pulled back well from its highs in recent weeks, the index has continued to hit new records as other stocks rose.
Meanwhile, separate data showed the S&P 500 outperformed three out of four exchange-traded funds over the past year, the worst performance for ETFs since at least 2010.
Additionally, funds diversified across asset classes and geographies also underperformed the S&P 500. Such portfolios have lagged the index in 13 of the past 15 years, according to data from Cambria Funds cited by Bloomberg. Other data showed that of the 370 asset allocation funds tracked by Morningstar, only one has outperformed the index since 2009.
“In a low-volatility, high-return environment like 2024, investors should stick to the basics: buy simple index funds and active mutual funds with a proven track record of generating alpha,” Evercore strategist Julian Emanuel told Bloomberg last month. “There’s no need to complicate the strategy. There’s beauty in simplicity.”
This story originally appeared on Fortune.com