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Mid-Year Index vs. Active Update

Samuel A. Kiburz Oct 6, 2022
chart looks at Equity Funds underperforming their benchmarks

Contents

Twice a year, S&P Dow Jones updates their SPIVA (S&P Indices Versus Active) report.

Not only do US active managers underperform 92% of the time over 10 years on an absolute basis, but underperformance goes up to 97% when you factor in risk. This means that you only have a 3% chance to beat the market using active funds.

Yes, year to date, active management did a little bit better with only 52% underperforming, but even with all the turmoil this year, it’s still roughly a coin toss. With underperformance quickly increasing to 90% after three years for risk adjusted returns, it’s not worth the risk.

Choose your horse wisely.

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