Active stock and bond managers had a tough time keeping up with their benchmarks in 2025, even as markets delivered strong returns across the board, according to the latest SPIVA U.S. Scorecard from S&P Dow Jones Indices.
For those reassessing active allocations after another big year for US equities, the headline number is hard to ignore: the SPIVA report found that “79% of all active large-cap U.S. equity funds underperformed the S&P 500,” up from 65% in 2024 and the fourth-worst showing for large-cap managers in the 25-year history of the study.
Large caps again set the pace, with the S&P 500 gaining 18% and logging 39 record highs, helped by a rebound in Big Tech and optimism around Federal Reserve rate cuts. Powered by AI-related enthusiasm toward the largest technology names, US equities staged a sharp comeback in 2025 after early-year turmoil, with expectations for easier policy extending the rally into mid- and small-cap names.
The universe of US stocks continued to revolve around large caps, which maintained their dominant outperformance across styles and regions. By the report's reckoning, the S&P 500 beat the S&P MidCap 400 by 10% and the S&P SmallCap 600 by 12%.
Meanwhile, mid- and small-cap managers struggled to deliver persistent alpha, with some 55% of all mid-cap funds and 41% of all small-cap funds falling short of their benchmarks despite having the ability to tilt up the market-cap spectrum to chase performance. Enthusiasm for Fed cuts helped the S&P MidCap 400 and S&P SmallCap 600 finish the year up 8% and 6%, respectively, but that lift did not translate into broad-based outperformance for active strategies in those segments.
International and global equity managers fared no better. The study said 63% of international funds and 76% of global funds underperformed their respective indexes, a result that appears tied to country bets as much as stock selection. With the US making up more than 70% of the S&P World Index and the S&P World Ex-US Index outperforming the S&P World by 11% in 2025, managers who were overweight domestic equities “may have been hurt accordingly,” the report noted.
From a pure performance standpoint, international benchmarks outpaced US stocks. All 38 category benchmarks in the scorecard posted positive returns, led by the S&P Developed Ex-US SmallCap and S&P World Ex-US indices, which gained 35% and 33%, respectively, and outstripped the S&P 500 by a double-digit margin in US dollar terms. For advisors, that gap underscores how a home-country bias toward US equities could have dragged on global and international fund results, even in a year when domestic large caps delivered strong absolute gains.
Conditions in fixed income were not much kinder. “Results for bond managers were poor, with a cross-category average underperformance rate of 70%,” the report said, compared with 62% across equities.
In core taxable categories, 82% of general investment-grade and 76% of high-yield funds trailed their benchmarks. The main exception was emerging market debt, where only 31% of funds underperformed, helped in part by a weaker US dollar and an environment that rewarded longer duration and higher-yielding bonds.
Mega-RIA picks up $250M advisor, while three firms head for &Partners.
Advisors who wait for a wealth event to introduce themselves to the next generation are already too late.
The Sixth Circuit sided with regulators - but its parting words may rattle the whole system
The fintech giant shifts its media strategy despite reporting record trading volumes this month amid its 10% staff reduction.
New Preferred Partner Program lets third-party asset managers including Federated Hermes and T. Rowe Price offer tax-managed separately managed account strategies through Franklin's platform.
Direct indexing is on pace to outgrow ETFs and mutual funds. Northern Trust's Ken Lassner explains why the advisors who get it wish they had started sooner.
As $84 trillion prepares to change hands, advisors who treat estate planning as peripheral are quietly building a sieve, not a book.
