U.S. value stock managers experienced the most "pain" in 2003, according to Blue Heron Consulting's Pain Index.
The bigger the spread between best-performing strategies and worst-performing strategies within an investment style, the more pain managers running out-of-favor feel, and are thus likely to make potentially damaging changes to their discipline, according to officials at Blue Heron, a consultant to money managers.
The spread between the best-performing strategies within value was 1,123 basis points: midcap value managers returned, on average, 36.1% last year, while dividend-yield managers returned 24.9%. (Differences in figures are due to rounding.) While that level of spread was typical for managers during the past 10 years, it still means dividend-yield managers look worse by comparison.
Experiencing the next highest pain threshold were growth stock managers, whose strategies experienced an 877-basis-point spread. Midcap growth managers performed the best, returning 37.7% on average, while consistent growth managers represented the weakest strategy, returning 29%.
Best off in 2003: core equity managers, where there was a spread of only 686 basis points from midcap core's 34.7% mean return to core value managers' 27.9% return.