Standard & Poor's indexes have outperformed actively managed funds for the five years ended June 30 based on equal-weighted averages, but it's a different story using asset-weighted averages, the company has reported. Standard & Poor's Index Services released its mid-year 2009 results for its Standard & Poor's Index Versus Active Fund Scorecard (SPIVA) on August 20.

For the five-year period ending June 30, 2009, the SPIVA scorecard shows that the S&P 500 outperformed 62.9% of actively managed large-cap funds, the S&P MidCap 400 outperformed 73.4% of mid-cap funds and the S&P SmallCap 600 outperformed 57.4% of small-cap funds. However, asset-weighted averages suggest a more level playing field, with active managers level or ahead of benchmarks in most categories except mid-caps and emerging markets.

"Our latest five-year data for equity funds can be interpreted favorably by proponents of both active and passive management," notes Srikant Dash, global head of research & design at Standard & Poor's and author of the report. "Passive management believers can point out that indices have outperformed a majority of active fund managers across all major domestic and international equity categories; with real estate being the lone exception. Conversely, proponents of active fund management can point to the asset-weighted averages."

The five-year data is unequivocal for fixed-income funds. Across all categories, except emerging-market debt, more than three fourths of active managers failed to beat their benchmarks. Similarly, five-year asset weighted average returns are lower for active funds in all but two categories.

The SPIVA scorecard shows quarterly performance data for U.S. equity, international and fixed-income mutual funds benchmarked against appropriate asset class indexes. More than 3,500 actively managed funds are covered in the scorecard. Mutual fund data is derived from CRSP Survivor-Bias-Free U.S. Mutual Fund Database.

The SPIVA methodology is designed to provide an accurate and objective apples-to-apples comparison of funds' performance versus their appropriate style indexes, correcting for factors that have skewed results in previous index-versus-active analyses in the industry. SPIVA scorecards show both asset-weighted and equal-weighted averages, include survivorship bias correction to account for funds that may have merged or been liquidated during the period under study, and show style consistency for each style group across different time horizons.

The SPIVA Scorecard is produced semi-annually, and can be accessed in its entirety at