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S&P indices vs actively managed funds

The March 2010 issue of Research Insights from S&P Indices puts forth some interesting results of an analysis of 5 years of data ending 12/31/2009:

"The S&P Indices Versus Active Funds (SPIVA) Scorecard reports performance comparisons corrected for survivorship bias, shows equal- and asset-weighted peer averages, and provides measures of style consistency for actively managed U.S. equity, international equity, and fixed income mutual funds... The CRSP Survivor-Bias-Free U.S. Mutual Fund Database provides the underlying data…

 Over the last five years,

  • the S&P 500 has outperformed 60.8% of actively managed large-cap U.S. equity funds;
  • the S&P MidCap 400 has outperformed 77.2% of mid-cap funds; and
  • the S&P SmallCap 600 has outperformed 66.6% of small-cap funds.
  • results are similar for actively managed fixed income funds. Across all categories, with the exception of emerging market debt, more than 70% of active managers have failed to beat benchmarks.

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