The SPIVA Scorecard Does Not Capture the Actual Experience of Investors

by Martijn Cremers, Jon Fulkerson, Timothy Riley, 6/29/26

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With the new Trump Accounts debuting on July 4, financial advisors are naturally discussing how these accounts fit into their clients’ overall investment strategy. Regardless of whether advisors welcome them or view them with caution, the accounts pose a deeper problem: They effectively codify the idea that “good advice” means defaulting families into low-cost index funds while excluding active strategies altogether.

That advice rests heavily on studies like the SPIVA U.S. Scorecard, which is typically read as saying that active management is a losing bet. However, when performance is evaluated through the lens of the actual experience of investors in active funds, the evidence is far more nuanced — and that nuance directly affects how advisors construct portfolios and provide value to clients.

A recent edition of the Scorecard reported that “over the 15-year period ending December 2024, there were no categories in which a majority of active managers outperformed.” Based on the Scorecard’s results, that conclusion may be an understatement. Over the last 20 years, the Scorecard reports that about 97% of actively managed large-cap growth funds underperformed.

SPIVA Data Does Not Show Real World Experience

The problem is that the way the Scorecard evaluates performance is not well aligned with the experience of actual investors. Improving that alignment reveals a significantly more balanced portrayal of the performance of active funds.

First, the Scorecard considers any active fund exiting the sample early — as a large percentage of funds do over a 15-year or 20-year period — as having underperformed. That assumption of underperformance if exiting is made regardless of a fund’s actual performance. Funds often shut down after poor performance, but some funds exit for other reasons — such as mergers — after outperforming for years. A better aligned choice is to consider each fund’s actual performance during the period it was available to investors.

Second, the Scorecard treats all active funds equally, even though most assets are concentrated in a small number of large funds. Weighting by initial fund assets reduces the influence of the many small funds held by very few investors, better aligning the analysis with the typical investor’s actual experience in active funds.

Third, the Scorecard compares active funds against hypothetical, zero-cost indexes (e.g., the S&P 500 and the Bloomberg Agg). While common practice, no investor can hold those passive benchmarks. To improve the alignment, we instead compare active funds against comparable index funds, the returns to which reflect what is actually available to investors through passive strategies.

Results for the Revised Methodology

Taken together, these three changes to the Scorecard methodology lead to markedly different conclusions. Closely replicating the Scorecard’s methods shows that 92% of active funds underperformed over the last 20 years, averaged across the U.S. equity categories. But with our proposed changes, just 55% of assets underperformed, with the underperformance rate below 50% in half of the categories. In other words, what previously looked highly unlikely is close to a coin flip.

Among bond funds, the impact is even larger: Assets in active bond funds have outperformed. Using the Scorecard’s methods and averaging across the categories, 71% of active bond funds underperformed over the last 10 years. In our analysis, the average is only 37%. Put another way, approximately two-thirds of the dollars invested in active bond funds outperformed equivalent index funds.

It’s Not as Simple as a Coin Flip

All of this assumes investors randomly select active funds and never revisit their choices. In reality, no financial advisor would recommend a 20-year buy-and-hold approach for a mutual fund, and decades of research point to ways to improve fund selection. For example, Active Share — a widely used measure of how different a fund is from its benchmark — has been shown to predict performance among equity, bond, and real estate funds. Informed investors are not limited to flipping a coin.

When we focus on the actual investor experience, we obtain a substantially more balanced portrayal of active fund performance. Among U.S. equities, assets invested in active and passive funds have had relatively similar performance. However, among bonds, we find assets invested in active funds have tended to outperform. These results suggest that the “good advice” codified in the Trump Accounts is less prudent than it appears.

Martijn Cremers is the Martin J. Gillen dean and the Bernard J. Hank professor of finance at the University of Notre Dame, Jon Fulkerson is a professor in and the chairperson of the department of economics & finance at the University of Dayton, and Timothy Riley is an associate professor at the University of Arkansas.

This piece is based on the authors’ analysis in “How the SPIVA U.S. Scorecard Understates the Performance of Actively Managed Mutual Funds,” which is available for free on SSRN. That research was supported by the Investment Adviser Association’s Active Managers Council. Martijn Cremers serves as an independent director at Ariel Investments and as an independent academic advisor to Touchstone Investments.

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The SPIVA Scorecard Does Not Capture the Actual Experience of Investors

SPIVA Data Does Not Show Real World Experience

Results for the Revised Methodology

It’s Not as Simple as a Coin Flip

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