The SPIVA Scorecard

Quick definition: The Standard & Poor's Index Versus Active (SPIVA) scorecard is S&P Global's semiannual research report measuring what percentage of professional active managers outperform their assigned benchmark index over rolling time periods, adjusted for survivorship and excluding inactive funds.

Key Takeaways

• Over 15 years, 88% of US large-cap active managers underperformed the S&P 500 after fees.
• S&P's survivorship-adjusted data shows even larger underperformance: only 3% of outperforming managers in the first 5 years matched it in the second 5 years.
• Mid-cap and small-cap funds show similar patterns, with 80–85% underperformance rates over 15 years.
• International equity active managers underperformed MSCI benchmarks at comparable or worse rates: 89% of large-cap international managers lagged their index.
• Bond fund underperformance is substantial too: 66% of active bond managers underperformed Barclays aggregate benchmarks over 15 years, rising to 80% over 20 years.

SPIVA's Core Findings: The Breadth of Underperformance

The SPIVA scorecard, first published in 2002 and updated semiannually since, stands as the most cited empirical evidence that active management as a category underperforms indexes. S&P Global measures performance net of all fees—the only metric that matters for an investor's wallet—and compares results to published benchmarks across dozens of fund categories and time horizons.

The headline number is stark. Over the 15-year period ending December 31, 2023, 88% of US large-cap active managers underperformed the S&P 500. That means only 1 in 8 large-cap funds beat the index. For mid-cap funds, the figure was 85% underperformance. Small-cap active managers fared slightly better but still disappointed: 80% underperformed the Russell 2000 over the same 15-year window.

These percentages are not flukes or statistical noise. SPIVA controls for survivorship bias—the tendency for defunct funds to disappear from databases, artificially inflating the returns of surviving funds. S&P includes dead funds in its calculations, which lowers the apparent success rate further. The methodology also excludes inactive funds, focuses exclusively on net-of-fee returns, and uses the GIPS (Global Investment Performance Standards) universe for consistency.

The Compounding Effect of Fees Over Time

One reason underperformance appears so severe is that fees compound. An active manager charging 1% annually, plus trading costs and turnover drag that add another 0.5–1%, faces a 1.5–2% annual headwind against the index. Over 15 years, that is not a minor friction; it is a structural disadvantage.

SPIVA's 2023 mid-year report showed this math explicitly for US equity funds:

• Large-cap: 88% underperformance over 15 years
• Mid-cap: 85% underperformance over 15 years
• Small-cap: 80% underperformance over 15 years
• All US equity actively managed funds combined: 86% underperformance over 15 years

The pattern persists across shorter and longer time horizons. Over a 10-year period, 82% of large-cap active funds underperformed. Over 20 years, the figure climbed to 91%, suggesting that the longer an investor waits, the more likely the verdict against active management becomes.

International Equity: No Hiding Place for Active Managers

A common refrain among active managers is that underperformance in US equities does not translate to global markets, where inefficiencies supposedly abound. SPIVA's international equity data contradicts this claim.

For large-cap international equity (benchmarked against the MSCI EAFE Index), SPIVA found that 89% of active managers underperformed over 15 years. For developed markets ex-US, the underperformance rate was 87%. Even in emerging markets, where information asymmetries are theoretically larger, 71% of active managers trailed their benchmarks over 15 years. The fee drag is the same globally: a 1.5% annual fee plus trading costs leaves no room for alpha.

Bond Funds: A Different Battleground

Active management in bonds shows a different pattern than equities, but underperformance is still the norm. Over 15 years through 2023, 66% of active bond managers underperformed the Barclays US Aggregate Bond Index. This is lower than the equity underperformance rates but still a clear majority. Over 20 years, the figure climbs to 80% underperformance.

Why is bond underperformance lower than equity underperformance? Bond markets are less efficient than equity markets in some respects—credit selection, duration management, and sector rotation offer more room for skill. However, the fee drag is similar (0.5–1% annually for bonds versus 1–1.5% for equities), and most active bond managers struggle to compensate for it through outperformance.

Notably, SPIVA's bond data shows that underperformance increases with longer measurement periods. A manager who beats the index in a 5-year window is unlikely to repeat the feat over 15 or 20 years, suggesting that bond market outperformance, like equity market outperformance, is not persistent.

Sector Funds: Even Worse Than Broad Funds

Active management in sector-focused funds shows even steeper underperformance than broad US equity funds. SPIVA tracking of sector funds reveals that over 10 years, 92% of energy sector funds underperformed, and 88% of technology sector funds lagged their benchmarks. The added complexity of sector concentration and the smaller investor bases appear to amplify fee and trading-cost disadvantages.

The Time Horizon Problem

SPIVA's data breaks down performance by measurement period: 1-year, 3-year, 5-year, 10-year, 15-year, and 20-year returns. One critical finding is that shorter time horizons show higher dispersion in outcomes. In any given year, roughly 20–40% of active managers beat the index—a rate barely better than random chance. But as the time horizon lengthens, the percentage drops monotonically. Over 15 and 20 years, underperformance crosses 85–90%.

This pattern suggests that short-term outperformance is largely noise, while long-term underperformance reflects systematic, structural disadvantages. An investor choosing an active manager based on recent 1- or 3-year outperformance is likely chasing performance that will not persist.

Geographic Variation: Does Any Region Favor Active?

SPIVA also breaks down results by geography. In the United States, active underperformance is most pronounced in large-cap stocks. In Europe, active manager underperformance in large-cap equities is 81% over 15 years. In Asia-Pacific (excluding Japan), the figure is 75% over 15 years, suggesting slightly more room for active management in smaller, less-researched markets. However, even in Asia-Pacific, three-quarters of active managers still lag their benchmarks—not a strong case for active management.

What About the Survivors? The Persistence Question

One of SPIVA's most important contributions is measuring not just whether managers outperform, but whether they do so consistently. S&P publishes "persistence of performance" data showing what percentage of top-quartile managers in a 5-year period remained top-quartile in the next 5-year period.

For US large-cap funds, the persistence of outperformance is abysmal. Only 3% of top-quartile performers in the first 5 years matched that ranking in the second 5 years. This means that beating the market once tells you almost nothing about whether a manager will beat it again. If performance were purely random, you would expect 25% persistence. Getting 3% shows that past outperformance is worse than a random predictor of future results—likely because the managers who briefly outperformed were taking higher risks or benefiting from short-term market conditions that did not persist.

Conclusion: The SPIVA Consensus

The SPIVA scorecard has become the gold standard for active management performance data because it is comprehensive, rigorous, and published by an independent, credible source. Its findings are unambiguous: the vast majority of professional active managers do not outperform low-cost index funds over meaningful time horizons. The data holds across asset classes, geographies, and market conditions. Fees and trading costs are the primary culprit, compounded by the rarity of true skill (as shown by the persistence data) and the reversion to the mean that plagues outperformers.

The SPIVA data does not prove that active management is worthless—a small percentage of managers do outperform, and there may be ways to identify them in advance (though SPIVA's persistence data suggests this is extremely difficult). Rather, SPIVA establishes that for the typical investor, passive indexing has been and likely will be the higher-probability path to long-term returns.

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Up next: we examine the 15-year record of active versus passive returns in detail, breaking down performance by year and showing where active managers had the best odds of success.