In the first half of 2015, the markets fluctuated modestly. According to S&P Dow Jones Indices, though, this was a tough period for fund managers.

The group’s data, known as the SPIVA (for S&P indices vs. active research) U.S. Scorecard, 65.3% of large-cap managers underperformed the benchmark, which rose 7.4% from July 2014 to July 2015. Plus, S&P says, over the five- and 10-year periods, 80.8% and 79.6% of large-cap managers, respectively, “failed to deliver incremental returns over the benchmark.”

As for mid-cap managers: “The investment landscape improved modestly,” said Aye Soe, CFA and senior director of index research & design, in S&Ps mid-year ‘15 report. About 48.1 % were unable to top the S&P MidCap 400 over the one-year period ending June 30.

In the small-cap sector, 58.5% of active small-cap funds lagged the benchmark. Plus, over the past five- and 10-year periods, the vast majority of actively managed mid- and small-cap funds underperformed their respective benchmarks, Soe explains.

“It is commonly believed that active management works best in inefficient markets, such as small-cap or emerging markets. This argument is disputed by the findings of this SPIVA report,” she wrote. “The majority of small-cap active managers consistently underperformed the benchmark in both the 10-year period and each rolling five-year period since 2002.”

Different Results

Market conditions favored growth-style investing in the past 12 months, according to S&P, when growth indices across market cap ranges returned higher than value indices. Plus, during this period, the majority of active large, mid- and small-cap growth funds outperformed their benchmarks.

Equity indices tracking international and emerging markets bounced back in the second half of 2015, though the gains were not sufficient; the groups posted negative returns for the past 12 months. With the exception of emerging market equity funds, though, funds invested in global, international, and international small-cap equity categories “fared better or at par with their respective benchmarks,” Soe states.

Managers across all international equity categories, however, were outperformed by their benchmarks over the 10-year investment horizon.

As for the U.S. fixed-income space, rates rose across the yield curve, and investor risk aversion added to wider spreads across most sectors in the first half of this year. Thus, longer-term government and investment-grade credit indices declined.

“The one-year results show that the majority of fixed-income managers across all maturity ranges in the government and credit categories underperformed their respective benchmarks,” the S&P research expert said. “Active fixed-income funds invested in long-term government bonds fared the worst, with nearly nine out of 10 managers underperforming their benchmarks.”

According to S&P, the high-yield bond market is generally considered to be best accessed via active investing, since passive vehicles have structural constraints that limit their ability to deal with credit risk. Still, the research group’s analysis of the 10-year results for the actively managed high-yield fund category revealed that over 90% of the funds underperformed the broad-based benchmark.

On the other hand, one-, three- and five-year performance figures were favorable for actively managed municipal funds. On a 10-year basis, though, the majority of the managers “underperformed their respective municipal indices,” Soe says.

In the market for floating-rate bank loans or senior loans, the number of new participation funds continues to increase. Actively managed senior loan funds did well over the past 12 months, and only about 12% of these funds underperformed the S&P/LSTA U.S. Leveraged Loan 100 Index. However, on a five-year basis, 70% of the funds were unable to top the benchmark.

The latest S&P research finds that some 23% of domestic equity funds and international equity funds have disappeared over the past five years. Among fixed-income funds, 17% have been merged or liquidated.