The Most Comprehensive Scorecard in Investing
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Since 2002, S&P Dow Jones Indices has published the SPIVA Scorecard — S&P Indices Versus Active — tracking the performance of actively managed funds against their passive benchmarks. Updated semi-annually and covering multiple geographies and asset classes, SPIVA is the most comprehensive ongoing study of active versus passive performance in existence.
The headline findings have remained remarkably consistent over two decades of publication.
The 15-Year Numbers
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Over 15-year horizons, approximately 85-90% of actively managed equity funds in most categories underperform their passive benchmark net of fees. This figure varies somewhat by market (US large-cap shows the highest underperformance rates; some international and small-cap categories show slightly lower rates) but the direction is consistent everywhere SPIVA has studied.
The US large-cap category is particularly stark. With thousands of professional analysts covering the same five hundred stocks, this market is among the most efficient on earth. The chance of consistently finding mispricing in such an environment — after paying for the research to find it — is very low. SPIVA data confirms this: over 15 years, typically 88-92% of actively managed US large-cap funds trail the S&P 500.
Survivorship Bias: Making the Truth Worse
The headline underperformance numbers, already damning, actually understate the problem due to survivorship bias. Investment funds that perform poorly tend to be closed — merged into better-performing siblings, liquidated, or simply shut down. If only surviving funds are included in the analysis, the track record looks better than it was for the full cohort of investors who experienced both the good and bad funds.
SPIVA's methodology explicitly corrects for this. The scorecard tracks all funds that were active at the start of the measurement period, including those subsequently closed. The result is that when survivorship bias is properly accounted for, the underperformance rate is even higher than naive comparisons would suggest. Investors evaluating past performance typically see only survivors — creating a systematically misleading picture.
Morningstar's Corroborating Evidence
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Morningstar's Active/Passive Barometer reaches similar conclusions through an independent methodology. Morningstar also examines whether active funds earn their fees compared to a blend of low-cost passive alternatives matching the fund's style characteristics. The finding: even funds that nominally outperform a single benchmark often fail to outperform a properly constructed passive alternative when costs are fully accounted for.
Where Active Fares Better
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The SPIVA data does show some categories where active management performs relatively better — though "better" is relative. Some actively managed intermediate bond and alternatives categories show lower underperformance rates than equity categories. The explanation is likely structural: bond markets include many forced or constrained buyers (pension funds required to hold certain ratings, central banks pursuing policy goals) that may create pricing inefficiencies a skilled active manager can exploit. But even in these categories, the majority of active funds still underperform over long periods.