New Study Finds SPIVA U.S. Scorecard Understates Performance of Actively Managed Mutual Funds

On May 6, the Investment Adviser Association announced the release of an academic study that challenges a widely cited measure of active management performance – the SPIVA U.S. Scorecard. The study argues that the study’s embedded methodological assumptions materially understate the performance of actively managed mutual funds, particularly in fixed income strategies.  The authors argue that three modifications to the methodology of the study could better reflect the typical mutual fund investor’s actual experience: not regarding funds that exit the sample to be underperforming, weighting results by fund assets, and comparing performance against passively managed funds rather than hypothetical benchmarks. The authors found that 86% of assets in high yield bond funds outperformed over the 5 years ending 2024, in contrast to SPIVA’s report that just 46% of funds in the category outperformed.  Similarly, over the same period, and applying the authors’ methodology, 43% of domestic equity assets outperformed, nearly three times SPIVA’s figure of 15%.

Click here for the Investment Adviser Association press release “Active Management Performs Much Better Than SPIVA U.S. Scorecard States, Finds New Academic Study.” 

Click here for the complete study “How the SPIVA U.S. Scorecard Understates the Performance of Actively Managed Mutual Funds.”