SPIVA

SPIVA, short for S&P Indices Versus Active, is a long-running study by S&P Dow Jones Indices that compares actively managed funds against the market index they are trying to beat. Its India scorecard has repeatedly found that most active funds do worse than the market over the long run.

What the scorecard measures

Twice a year, SPIVA checks what share of active funds in each category actually beat their benchmark, after fees, over various periods. It also corrects for a quiet bias: funds that did badly and were shut down or merged are counted, so the picture is not flattered by looking only at survivors. The result is one of the most honest, independent scorecards of whether paying for active management pays off.

What India’s results tend to show

The consistent finding, in India and around the world, is that over long periods most active funds trail their index, and the longer the period, the larger that majority. A fund can beat the market for a year or three, but staying ahead for ten or fifteen years is rare, and today’s winners are not reliably tomorrow’s.

Why it matters to you

SPIVA is the evidence behind the case for low-cost index funds: if most active managers cannot beat the index after fees, simply buying the index cheaply is a sensible default for long-term money. It does not mean active funds are useless, only that picking a lasting winner in advance is hard. See active vs passive investing.