A new report gives added ammunition to the champions of passive investing.

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."


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.

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