SPIVA is a national treasure. Run by S&P Dow Jones Indices, it's by far the most rigorous attempt to measure the probability that an active fund manager will outperform the relevant passive index.
Data: SPIVA U.S. Year-End 2018; Chart: Harry Stevens/Axios
By the numbers: The year-end 2018 SPIVA scorecard is now out. It shows 69% of domestic funds underperforming the S&P 1500 over 1 year, and 88% of them underperforming over 5 years.
- Internationally, 71% of global funds underperformed in 2018, with 85% underperforming over 5 years.
- Among bond funds, 100% of long-dated and intermediate-dated government bond funds have underperformed over the past 3 years.
My thought bubble: People choose fund managers because they don't have the requisite time or skills to pick stocks themselves. But if you're not skilled enough to pick a stock that will outperform, you're not skilled enough to pick a fund manager that will outperform, either. Passive investment is a much smarter bet.
