The S&P Dow Jones Indices’ SPIVA (S&P Indices Versus Active) report has been leading the debate about the underperformance of active mutual fund managers and how passive investing through index funds or exchange-traded funds delivers superior returns. 

In this Business Line’s State of Economy podcast, Benedek Vörös, Director, Index Investment Strategy, S&P Dow Jones Indices, explains the reasons behind this underperformance and delves into the performance of active fund managers across geographies and cycles. 

He says that the key learnings of the SPIVA report, which includes the United States, Australia, Canada, Europe, India, Japan, South Africa, and the Middle East and North Africa is that over the past 20 years, most active managers had underperformed their appropriate benchmarks over the full market cycle. There are however variations across shorter periods. 

However, a higher percentage of fixed-income managers outperform the benchmark compared to equities. That’s a large part due to the use of two popular strategies, one, taking duration risk and the second, betting on the credit quality. 

Listen in!

Host: Lokeshwarri SK, Producers: Nabodita Ganguly, Siddharth Mathew Cherian.


About the State Of The Economy podcast

India’s economy has been hailed as the bright spot amid the general gloom that seems to have enveloped the rest of the world. But several of its sectors still stutter about even while others seem set to fire on all cylinders. To help you make sense of the bundle of contradictions that the country is, businessline brings you podcasts with experts ranging from finance and marketing to technology and start-ups.