A study released this week by professors from the University of Notre Dame, the University of Dayton, and the University of Arkansas challenges the methodology behind the S&P Indices Versus Active (SPIVA) US Scorecard, a benchmark long used to argue that most active fund managers underperform their passive counterparts. The research, supported by the Investment Adviser Association’s Active Managers Council, contends that SPIVA’s framework creates structural biases that paint an overly negative picture of active management.
The paper, titled “How the SPIVA US Scorecard Understates the Performance of Actively Managed Mutual Funds,” was authored by K. J. Martijn Cremers, Jon Fulkerson, and Timothy B. Riley. It argues that SPIVA’s equal-weighting of all funds—rather than weighting by assets under management—fails to reflect where investors actually allocate capital. The authors found that larger active funds tend to outperform smaller peers, meaning asset-weighted results are consistently stronger than equal-weighted results across many categories.
“Broadly speaking, the SPIVA US Scorecard is too negative on the value of active management,” said co-author Tim Riley in a statement. “Staying with the Scorecard’s framework, we identify substantially more value after modifying key empirical choices to better align with the actual mutual fund investor experience.”
One of the study’s central criticisms is that SPIVA effectively measures fund survival rather than investor outcomes. Funds that close or merge are automatically classified as failures, regardless of their performance prior to liquidation. This, the authors argue, skews the data against active managers, particularly those that may have been closed due to strategic decisions rather than poor performance.
The study found the strongest evidence for active management in fixed income markets. According to the researchers, active bond managers outperformed passive counterparts over both shorter and longer time horizons, contradicting typical SPIVA conclusions. For example, 86% of assets in high-yield bond funds outperformed over the five years through 2024, compared with SPIVA’s finding that only 46% of funds in the category beat their benchmark.
Karen Barr, president and CEO of the Investment Adviser Association, said the findings reinforce longstanding industry concerns. “The Active Managers Council has long maintained that the active-passive scorecards are overly negative on active management,” Barr said. “We are pleased that this study not only details the scorecards’ methodology issues but also provides a more realistic view of active management’s aggregate performance.”
The findings may resonate with advisors who have long argued that bond markets are less efficient than equities, offering greater opportunities for active managers to add value through security selection, duration management, and credit analysis. The study also suggests that investor dollars may already be voting against the traditional SPIVA narrative, with capital increasingly concentrated in stronger-performing active strategies.
For advisors, the research underscores the importance of due diligence in manager selection. As active ETFs fuel record launches in 2025, the ability to identify top-quartile managers becomes even more critical. The study’s asset-weighted approach may offer a more practical lens for evaluating fund performance in client portfolios.
