How active fund managers have fared against global indices


Posted by: Nicola Macdonald, on April 11, 2017.


Each year the S&P Dow Jones Indices release their S&P Indices Versus Active Funds (or SPIVA) Scorecard report. This looks at how active fund managers have fared against global indices.

Robin Powell of The Evidence Based Investor gives us his synopsis and a UK focused view on this report. Click image to read:

How active fund managers have fared against global indices

Aside from the poor results from the global active fund management industry in 2016 the SPIVA report highlights another interesting statistic. Assuming you are lucky enough to pick an active fund manager that provides top quartile performance, how long does that last?

SPIVA has found that of the 703 funds that fell into the top quartile performance (which does not necessarily mean they even matched the market rate of return, merely were in the top 25% of average active fund performance) only 146 remained top quartile in the following year, 49 after two years, 13 after three and just two after 4 years. This may imply top quartile performance in any one year is more down to luck than skill. This is clearly explained in the infographic How Many of the Best-Performing Active Managers Stay in the Top Quartile?, which you’ll find by clicking on the link and scrolling halfway down the page.

Swindells Financial Planning does not employ active funds when building portfolios for you with a focus on index investments and controlling the controllables such as costs of investment, infrequent trading and the correct risk profile for your goals.

If you would like Swindells Financial Planning to assist with your investments please complete the contact form or give us a call on 01825 76 33 66. We’d be delighted to help.



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