May 20, 2019

Stock pickers are having their second-best year since the crash

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Data: Bank of America-Merrill Lynch; Chart: Axios Visuals

Less than half of actively managed funds are beating their benchmarks this year, but that's the second-best rate since the financial crisis, according to data from Bank of America-Merrill Lynch.

Why it matters: Stock pickers have performed much better against their respective Russell indexes the last few years than they had in the years immediately following the crisis. However, they've had significantly less money to invest and less competition.

  • In 2018, mutual funds saw the highest yearly outflows on record, and Moody's expects passive investing vehicles to hold more assets than actively managed funds by 2021.
  • Around 15% of ownable shares of S&P 500 companies are now held by passively managed funds, BAML's data shows.
  • Currently, 44% of funds in the U.S. are passively managed, vs. 56% actively managed, but the passive share has more than doubled since 2009.

Some good news for active managers: "Stock-picking is making a comeback," notes Savita Subramanian, BAML's equity and quantitative strategist. "For the first time post-crisis, stocks are now more differentiated (less correlated with each other) than sectors are with one another, suggesting picking stocks matters more than picking sectors."

  • "Persistently better performance may help stem outflows from active."

Go deeper: Investors tire of hedge funds, but keep them for the downturn

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Top Trump ally sounds 2020 election alarm over coronavirus response

Photo: Jim Watson/AFP via Getty Images

There is growing concern among top conservative leaders that the Trump administration isn't addressing the long-term economic impact of the coronavirus, several sources tell Axios. One top adviser said if the recovery is bungled it could cost President Trump the election.

What we're hearing: "The next 4-8 weeks is really going to decide whether Trump gets reelected," Stephen Moore, Trump's former nominee for the Federal Reserve board, told Axios. If the administration mishandles its economic recovery efforts, he said, Trump is "in big trouble."

Coronavirus dashboard

Illustration: Aïda Amer/Axios

  1. Global: Total confirmed cases as of 10 p.m. ET: 1,600,427 — Total deaths: 95,506 — Total recoveries: 354,006Map.
  2. U.S.: Total confirmed cases as of 10 p.m. ET: 465,329 — Total deaths: 16,513 — Total recoveries: 25,410Map.
  3. Public health latest: U.S. has expelled thousands of migrants under a CDC public health orderDr. Anthony Fauci said social distancing could reduce the U.S. death toll to 60,000.
  4. Business latest: The Fed will lend up to $2.3 trillion for businesses, state and city governments — After another 6.6 million jobless claims, here's how to understand the scale of American job decimation.
  5. 2020 latest: Top conservative leaders are concerned the Trump administration isn't addressing the virus' long-term economic impact.
  6. States latest: FEMA has asked governors to decide if they want testing sites to be under state or federal control.
  7. World latest: Lockdowns have led to a decline in murders in some of the world's most violent countries — Boris Johnson is moved out of the ICU but remains in hospital with coronavirus.
  8. In Congress: Senate in stalemate over additional funding for small business relief program.
  9. 1 SNL thing: "Saturday Night Live" will return this weekend in a remotely produced episode.
  10. What should I do? Hydroxychloroquine questions answeredPets, moving and personal healthAnswers about the virus from Axios expertsWhat to know about social distancingQ&A: Minimizing your coronavirus risk.
  11. Other resources: CDC on how to avoid the virus, what to do if you get it.

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Federal court temporarily blocks coronavirus order against some abortions

Gov. Greg Abbott. Photo: Tom Fox-Pool/Getty Images

A federal judge ruled Thursday that clinics in Texas can immediately offer medication abortions — a pregnancy termination method administered by pill — and can also provide the procedure to patients nearing the state's time limits for abortions.

Driving the news: The decision comes after federal appeals court ruled 2-1 on Tuesday in favor of an executive order by Republican Gov. Greg Abbott that prohibits abortions during the coronavirus outbreak.

Go deeperArrowUpdated 8 hours ago - Politics & Policy