“The belief that bear markets strongly favor active management is a myth,” says Srikant Dash, global head of research and design at Standard & Poor’s. S&P Index Services released the year-end 2008 results for its Standard & Poor’s Index Versus Active Fund Scorecard (SPIVA) Monday.
According to findings, over the five-year market cycle from 2004 to 2008, the SPIVA scorecard shows that the S&P 500 outperformed 71.9 percent of actively managed large-cap funds, the S&P MidCap 400 outperformed 75.9 percent of mid-cap funds, and the S&P SmallCap 600 outperformed 85.5 percent of small cap funds. These results are similar to that of the previous five-year cycle from 1999 to 2003.
“A majority of active funds in each of the nine domestic equity style boxes were outperformed by indices during the down markets of 2008. The bear market of 2000 to 2002 showed similar outcomes,” Dash says.