More than three-quarters of active mutual fund managers are falling behind the S&P 500 and the Dow, a new report finds.
The S&P Indices versus Active (SPIVA) scorecard, which tracks the performance of actively managed funds against their respective category benchmarks, recently showed 79% of fund managers underperformed the S&P last year. It reflects an 86% jump over the past 10 years.
S&P Global CEO Doug Peterson told CNBC’s “ETF Edge” the quarterly report is built on non-public information.
“The only people who have access to it have very strict rules about their own standards of performance and behavior,” Peterson said last week. “[The S&P Dow Jones Indices committee] is able to look at the economy as a whole or look at different aspects of what they want to have the index perform against.”
The corporation has been releasing its annual SPIVA report since 2002. First, it was focused on the U.S. and later was extended to countries across the globe.
The latest report marks 12 consecutive years the average actively managed large-cap fund underperformed the S&P 500, noted Todd Rosenbluth, CFRA senior director of ETF and mutual fund research.
“It’s hard to outperform,” Rosenbluth said on “ETF Edge.” “It costs more for active managers when they’re trying to compete with the S&P 500 that is essentially free through the ETF wrapper.”