Investing in Funds & ETFS: A Monthly Analysis --- Mixing It Up: Good Market for Actively Managed Funds? --- This adviser believes stock-picking managers are poised for improved performance vs. indexers
The current stock-market environment favors so-called active fund managers, who pick individual stocks in an attempt to beat broad market indexes, says Owen Murray, an investment adviser in Houston.</br></br>Mr. Murray says actively managed funds generally struggled in 2011 and to some extent in 2012, as stocks tended to move in lock step with macroeconomic news.</br></br>But the "market as a whole is becoming desensitized to these macro risks," says Mr. Murray, director of investments at Horizon Advisors LLC. A case in point: Markets reacted sharply in 2011 to fears that the U.S. debt ceiling wouldn't be raised, but when a similar possibility seemed evident recently, stocks barely moved.</br></br>Also, "stock valuations are getting pricier," he says, "so as an investor you'd want to focus on companies that have more financial strength" rather than owning the broad market.</br></br>In this column, we feature model portfolios of mutual funds and exchange-traded funds. Horizon Advisors was founded in 1999 by the co-founders of Houston accounting firm Maddox Thomson & Associates. Horizon currently manages around $220 million, mainly for individuals.