As reported in Barron’s this week, the hard data on active versus passive investments over the last 15 years doesn’t leave a whole lot left to debate:
“Last week S&P Dow Jones published its 15th annual S&P Indices Versus Active, or SPIVA, scorecard, and the results were hardly surprising. Most active mutual funds, across a wide range of stock and bond categories, failed to beat their benchmarks in every major time period, after accounting for fees.
This yearâs scorecard was particularly sobering: It chronicled a full 15 years of suboptimal performanceâa full market cycleâdiscrediting some of the common explanations (such as low dispersion and high volatility) for why active managers as a group havenât been able to get an edge.
Over the 15-year period ended Dec. 31, 2016, more than 92% of large-cap managers, 95% of mid-cap managers, and 93% of small-cap managers trailed their bogies. While the results were slightly better for some categories – âonlyâ 79% of large-value funds lagged the S&P 500 Value Index over that periodâthe scorecard offered not a glimmer of good news for active funds.”
