Summary
In this report, we add institutional accounts to the mutual funds analyzed in the S&P Indices versus Active (SPIVA) U.S. Scorecard. We aim to provide the institutional community with the ability to judge managers’ true skill without the possible distortions that fees may create and to illustrate the similarities and differences between the performance of open-end funds and segregated institutional accounts across categories.
This edition of our scorecard shows that underperformance rates over the long term among institutional equity accounts are generally similar to those of mutual funds, with or without fees. However, the importance of fees in determining underperformance rates varied considerably across asset classes, with a more significant difference in fixed income categories (see Exhibit 1).
Report Highlights
Overall, 2022 continued to demonstrate better long-term net-of-fees performance in institutional accounts than in mutual funds, with lower 10-year underperformance rates in all 21 reported equity segments (see Section I and Exhibit 3) and a significant improvement in the cross-category average across fixed income categories (see Exhibit 1).
Shorter-term horizons show a broader range of outcomes, with some pockets of admirable performance. Within U.S. equity institutional accounts, only 39% of All Large-Cap Funds underperformed the S&P 500® in 2022 on a gross-of-fees basis, the lowest underperformance rate for the category since this report’s inception in 2015 (see Report 1, Section II). Active fixed income managers posted even stronger relative performance in 2022, with majority outperformance reported in 12 out of 17 categories. Notably, just 9% of managers in the inflation-linked category underperformed the iBoxx TIPS Inflation-Linked Index (see Report 11, Section II).
