Active managers in almost all categories underperformed their respective benchmarks for the trailing 12 months, according to results from Standard & Poor's Indices Versus Active (SPIVA), which keeps score in the passive-versus-active debate.
The exception was small-cap growth -- the only style category where managers drew parity with the corresponding benchmark, notes Aye Soe, director of global research and design for S&P Dow Jones Indices and a contributor to the report.
"There is nothing novel about the index versus active debate," the report notes. "It has been a contentious subject for decades, and there are a few strong believers on both sides, with the vast majority of investors falling somewhere in between."
DOMESTIC VS. INTERNATIONAL
According to the SPIVA report, 59.58% of large-cap funds, 68.88% of mid-cap funds and 64.27% of small-cap funds underperformed their respective benchmark indices. Across the board, actively managed funds also lagged the benchmarks for three- and five-year time horizons across all domestic equity categories.
Among international equity categories, 62.59% of global funds, 65.86% of international funds and 74.53% of emerging markets funds fell behind the benchmark indices over the past five years, the study found.
But there were a couple of areas where active management tended to win out. A large percentage of international small-cap funds outperformed their benchmarks regardless of the time period, notes Soe.
Fixed income was another bright spot for active management, the report found: A majority of active fixed-income managers in longer-term government, longer-term investment grade, global income and a few municipal categories outperformed the corresponding benchmarks.
Benchmark indices in the rate-sensitive and credit-sensitive sectors have declined, the report notes, creating opportunities for active managers.