Most actively managed U.S. equity mutual funds readily beat their indexes last year, an unusual outcome in a period marked by high anxiety and skyrocketing stock and bond prices in the wake of the 2008 market crash.

The Standard & Poor’s Indices Versus Active Funds Scorecard data released this week also showed that over one-, three- and five-year periods, the only benchmark to come out ahead of actively managed funds was the S&P MidCap 400 Index, a reflection of how largely last year looms as a banner year of outperformance for active managers.

This year’s SPIVA report was a sharp departure from the historical trend. For most of the last decade, active management has substantially underperformed in most stock and bond asset classes, with only a handful of managers beating their benchmark. The last year active management fared better was in 2000, when 40.5 percent of managers failed to beat their indexes, versus 2009’s 41.67 percent.

Overall last year, the percentage of equity managers that were outperformed by their benchmarks generally fell well below three- and five-year figures, with small-cap managers faring the best of all equity categories. Just less than a third of small-cap managers were beaten by their index, compared with 63.21 percent and 66.60 percent in the three- and five-year periods, respectively.

The outperformance for active managers was even more pronounced on an asset-weighted basis, which confines active vs. passive comparisons to funds of similar sizes.

Most active bond managers also handily beat most their indexes last year and, as in the realm of equities, the asset-weighted data drove home the point even more.

The notable fixed-income exception last year was in high-yield debt, with the Barclays High Yield Index crushing active managers and retaining the upper hand over both the three- and five-year periods. Indeed, at the five-year cutoff, most bond indexes outperformed active managers.

Average Performance Of Selected U.S. Equity Funds On Asset-Weighted Basis

Average Performance Of Selected U.S. Fixed-Income Funds On Asset-Weighted Basis

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