Most Active Managers Underperform Their Benchmark
Percentage of active funds trailing the S&P 500
S&P Global's SPIVA scorecard consistently shows that 80-95% of actively managed US large-cap funds underperform the S&P 500 over 15+ year periods. The underperformance rate increases with time horizon.
What history says
Editorial commentary written by ALAN analysts. Figures cited below are analyst-authored context — they are not derived from the chart above and may reflect different windows or sources.
This is not a fringe claim — it is the official S&P Global SPIVA scorecard published annually. The data is comprehensive (survivorship-bias-free) and covers thousands of funds.
Even over 5 years, ~75% of active funds trail. Over 10 years, ~85%. The small minority that outperform rarely persist — past outperformance has near-zero predictive power.
Use index funds for core exposure (70-80% of portfolio) and active/factor strategies only for the satellite portion where you have high conviction in the manager or strategy.
Default your core holdings to low-cost index funds and require a specific written thesis before funding any active manager — with most active funds trailing over long horizons, the burden of proof belongs on the expensive option, and it deserves a standing review date.