Despite rich investment opportunities presented by market dislocations, most US active equity mutual funds underperform passive benchmarks between February 20 and April 30, 2020. The average fund underperforms the S&P 500 index by 5.6% during the ten-week period (29% annualized). The average underperformance relative to the style benchmark is 2.1% (11% annualized). Eighty percent of funds have negative CAPM alphas, and average fund alphas computed relative to five different factor models are all negative. These results undermine the popular hypothesis that active funds make up for their disappointing unconditional performance by performing well in recessions.
Insights / Podcast episode•Feb 25, 2021
The Surprising Results of Pandemic Unemployment Benefits
Eduardo Porter, Tess Vigeland, Peter Ganong, Fiona Greig
In March 2020, the CARES Act expanded who was eligible for unemployment benefits, how much...
Topics: COVID-19, Employment & Wages
Finding•Feb 17, 2021
Does Private Equity Investment in Healthcare Benefit Patients? Evidence from Nursing Homes
Atul Gupta, Sabrina T. Howell, Constantine Yannelis, Abhinav Gupta
Private equity ownership (PE) increases the short-term mortality of Medicare patients by 10%, implying 20,150 lives lost due to PE ownership over a twelve-year sample period.
Topics: Financial Markets, Health care