Summary
In this report, we add institutional accounts and SMA/wrap accounts to the mutual funds analyzed in the S&P Indices versus Active (SPIVA) U.S. Scorecard. We aim to provide the institutional community with the ability to judge managers’ true skill without the possible distortions that fees may create and to illustrate the similarities and differences between the performance of open-end funds, SMA/wrap accounts and segregated institutional accounts across categories.
Exhibit 1 shows that equity underperformance rates over the long term among institutional and SMA/wrap accounts were generally similar to those of mutual funds, with or without fees, while fees made a more significant difference across fixed income categories. After deducting fees in all formats, at least 80% of equity funds and at least 50% of fixed income funds underperformed their respective benchmarks over the 10-year period ending Dec. 31, 2025.
Report Highlights
Within our most closely watched category of large-cap U.S. equity, 67% of institutional accounts and 75% of wrap accounts underperformed the S&P 500® in 2025 on a gross-of-fees basis, better than the 79% reported for their mutual fund peers (see Sections II and III). This contrasts with the prior two years, when large-cap mutual fund underperformance rates were lower than their institutional and wrap account peers.
