Lubos Pastor and Blair Vorsatz
Active fund managers are widely believed to outperform during market downturns. This column uses daily returns from US active equity mutual funds to examine fund performance and investor behaviour in the midst of the COVID-19 crisis. It finds that active equity mutual funds underperform a variety of passive benchmarks, contradicting the popular belief that active managers outperform in downturns. In addition, investors have favoured sustainable funds during the crisis, suggesting that sustainability is now viewed as a necessity rather than a luxury good.
