Do Actively Managed Funds Beat the Market? What SPIVA's Data Shows

Written by Greg, founder of FTMarketWatch — a former licensed commodities trader, self-directed investor since. Not a licensed financial advisor.

Citation: S&P Dow Jones Indices, “SPIVA U.S. Scorecard,” published semi-annually since 2002. View source →

Study Overview

SPIVA (S&P Indices Versus Active) is a long-running research series from S&P Dow Jones Indices that tracks what percentage of actively managed mutual funds underperform a comparable benchmark index, across different fund categories and time horizons.

Methodology Summary

SPIVA compares the returns of actively managed mutual funds within a category (for example, large-cap U.S. equity funds) against an appropriate benchmark index (for example, the S&P 500), over 1-, 3-, 5-, 10-, and 15‑ to 20-year periods.

The methodology adjusts for survivorship bias — the tendency for underperforming funds to be closed or merged away, which would otherwise flatter the surviving funds' average track record.

Key Findings

In the 2025 scorecard, 79% of actively managed large-cap U.S. equity funds underperformed the S&P 500 for the year, worse than the 65% underperformance rate reported for 2024.
Looking at longer horizons, SPIVA has repeatedly found that actively managed funds have tended to underperform their benchmarks over both short- and long-term periods, a pattern that has held across most fund categories and many years of the scorecard.
A companion report, the SPIVA Persistence Scorecard, has found that funds which outperform in one period frequently fail to keep outperforming in the next — suggesting that a fund's good year is often difficult to use as a predictor of its next one.

Limitations

A single year's data (like the 79% figure for 2025) reflects one particular market environment and can vary significantly from year to year — it shouldn't be read as a fixed annual rate.
Not every researcher agrees on the exact percentages: at least one alternative analysis has argued that SPIVA's standard methodology, which doesn't weight results by fund size or use asset-weighted passive benchmarks, may understate how active funds perform relative to a more tailored comparison. The overall direction of the finding — that a majority of active funds underperform over most periods — has nonetheless been broadly consistent since SPIVA began in 2002.
SPIVA measures fund categories in aggregate; it doesn't tell you whether a specific fund you're considering will underperform, only what's been typical for its category.

Practical Meaning

This data is a big part of why low-cost index funds and ETFs are often suggested as a reasonable default for beginner investors: broadly, betting on a specific active manager to consistently beat a benchmark has been a difficult bet to win, both historically and recently. That doesn't mean no active fund can outperform in a given year — 21% of large-cap funds did in 2025 — but it does mean the odds have typically favored the benchmark over any single actively managed fund.