Active versus passive investment in declining markets

The latest S&P Indices versus Active (SPIVA^®) Scorecard provides an update on the active versus passive investment debate

SPIVA research measures actively managed funds against their index benchmarks worldwide.

Declining markets can make active management skills more valuable, and the 2022 SPIVA scorecard identifies several fund categories in which a majority of active managers outperformed. However, in the largest and most closely watched category, US large cap equities, a slim majority underperformed. On the positive side, this was the lowest underperformance rate since 2009 and the fourth best across more than two decades of S&P’s annual SPIVA Scorecards. Less positively, 2022 was characterised by several specific and unusual active tailwinds that may not persist.

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