IAA-Backed Study Claims Active Managers Outperform SPIVA Under Revised Methodology
A new academic study supported by the Investment Adviser Association’s Active Managers Council challenges the widely cited SPIVA US Scorecard, arguing it presents an overly pessimistic view of active fund management. Conducted by professors from the University of Notre Dame, University of Dayton, and University of Arkansas, the research contends that SPIVA’s methodology contains structural biases, such as classifying closed funds as failures and using equal weighting rather than asset-weighting. The authors assert that these methods fail to reflect actual investor experiences. By adjusting for asset-weighted performance and survival bias, the study finds that the performance gap between active and passive strategies narrows significantly or even reverses in certain categories. Notably, active bond managers demonstrated strong outperformance, with 86% of assets in high-yield bond funds beating benchmarks over five years, contradicting SPIVA’s findings. This research emerges as assets in active ETFs within RIA portfolios have surged to nearly $400 billion, indicating sustained demand for active strategies despite industry narratives favoring passive investing.
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IAA-Backed Study Claims Active Managers Outperform SPIVA Under Revised Methodology
A new academic study supported by the Investment Adviser Association’s Active Managers Council challenges the widely cited SPIVA US Scorecard, arguing it presents an overly pessimistic view of active fund management. Conducted by professors from the University of Notre Dame, University of Dayton, and University of Arkansas, the research contends that SPIVA’s methodology contains structural biases, such as classifying closed funds as failures and using equal weighting rather than asset-weighting. The authors assert that these methods fail to reflect actual investor experiences. By adjusting for asset-weighted performance and survival bias, the study finds that the performance gap between active and passive strategies narrows significantly or even reverses in certain categories. Notably, active bond managers demonstrated strong outperformance, with 86% of assets in high-yield bond funds beating benchmarks over five years, contradicting SPIVA’s findings. This research emerges as assets in active ETFs within RIA portfolios have surged to nearly $400 billion, indicating sustained demand for active strategies despite industry narratives favoring passive investing.
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