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SPIVA U.S. Year-End 2016 How do active managers stack up against their benchmarks over short and long time periods?
BY Aye Soe


• Starting with this scorecard, we will report the relative outperformance or underperformance of actively managed funds against their respective benchmarks over a 15-year investment horizon. The longer time horizon provides a complete market cycle to measure the effectiveness of managers across all categories.

• Given that market conditions can impact managers’ performance from year to year, we also added rolling three-year relative performance figures from 2003 through 2016, calculated on a semiannual basis across major domestic and international equity categories.

• The U.S. equity market finished 2016 on a strong run. Even though the S&P 500®, S&P MidCap 400®, and S&P SmallCap 600® all posted 10% losses by mid-February 2016, the indices rallied back to finish the year on a positive note, posting 11.96%, 20.74%, and 26.56%, respectively. Approximately one-half of the year’s total return for the S&P 500 and S&P MidCap 400 came within the last two months of the year, while almost two-thirds of the S&P SmallCap 600’s gains came from the same period.

• During the one-year period ending Dec. 31, 2016, 66% of large-cap managers, 89.37% of mid-cap managers, and 85.54% of small-cap managers underperformed the S&P 500, the S&P MidCap 400, and the S&P SmallCap 600, respectively. These figures are on par with the one-year performance figures reported in June 2016, with the exception of large-cap managers, who faired relatively better.

• Figures over the five-year period did not change significantly from the SPIVA U.S. Mid-Year 2016 Scorecard. During the five-year period ending Dec. 31, 2016, 88.3% of large-cap managers, 89.95% of mid-cap managers, and 96.57% of small-cap managers underperformed their respective benchmarks.


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