Since the first publication of the S&P Indices Versus Active (SPIVA) U.S. Scorecard in 2002, S&P Dow Jones Indices has been the de facto scorekeeper of the ongoing active versus passive debate. The SPIVA Japan Scorecard measures the performance of actively managed funds offered in Japan against assigned benchmarks over various time horizons, covering large-, mid- and small-cap segments, as well as international and global equity funds.
Mid-Year 2025 Highlights
The first half of 2025 revealed a mixed picture for active managers in Japan, depending on the category. Less than one-third of funds in the Japanese Large-Cap and Emerging Equity categories underperformed their relevant benchmarks, recording some of the lowest underperformance rates in history. In contrast, Japanese Mid-/Small-Cap, Global Equity, U.S. Equity and International Equity funds all had underperformance rates exceeding 60%. Despite these short-term differences, a consistent trend emerged: a firm majority of funds across all categories underperformed over the past 15 years.
- Japanese Large-Cap Funds: The S&P/TOPIX 150 finished H1 2025 up 2.3%, while actively managed Japanese Large-Cap funds gained 0% and 2.8% on equal- and asset-weighted bases, respectively. In this category, only 27% of funds underperformed the benchmark. However, underperformance rates rose for longer time frames, exceeding 80% over the 10- and 15-year horizons.
- Japanese Mid-/Small-Cap Funds: Actively managed Japanese Mid-/Small-Cap funds did not perform as well as their large-cap counterparts, recording an underperformance rate of 63% during H1 2025. Nonetheless, this category exhibited better relative performance over longer horizons, with underperformance rates of 54% and 66% over 10 and 15 years, respectively.
- Global Equity Funds: The S&P World Index posted a 1.1% gain (in JPY terms) in H1 2025, while Global Equity funds delivered average returns of -0.6% and 8% on equal- and asset-weighted bases, respectively. During this period, 74% of Global Equity funds underperformed the benchmark, with over 90% of funds lagging over the three-year period or longer.
- U.S. Equity Funds: U.S. Equity funds domiciled in Japan faced challenges during H1 2025. While the S&P 500® posted a 2.4% loss in JPY terms, 83% of these funds suffered greater losses, recording an asset-weighted average return of -5.8%.
- International Equity Funds: International Equity funds recorded a majority underperformance rate of 78% in H1 2025. These funds delivered an asset-weighted average return of -1.6% compared to a 0.1% gain in the S&P World Ex-Japan Index in JPY terms. Underperformance rates generally rose over the longer term, reaching 100% over a 15-year period.
- Emerging Equity Funds: Emerging Equity funds performed notably well in H1 2025, with only 28% of funds underperforming the benchmark. These funds achieved an asset-weighted average return of 4.1%, surpassing the 2.4% return of the S&P Emerging BMI in JPY. However, this period appears to be an outlier, as 100% of funds underperformed by a 10-year time horizon.
- Fund Survivorship: Fund liquidation remained low overall, with only 1.4% of active funds across all reported categories being merged or liquidated in H1 2025. Global Equity funds experienced the largest attrition rate at 2.8%, while Japanese Large-Cap funds had the lowest at just 0.3%. Over a 15-year period, 53% of all funds failed to survive (see Report 2).
Market Context
After two years of strong performance, Japanese equities faced headwinds in the first half of 2025. Uncertainty surrounding U.S. tariffs, combined with the sharp appreciation of the Japanese yen against the U.S. dollar—evidenced by a 9.2% gain in the S&P Japanese Yen Futures Index—negatively impacted market sentiment in this export driven economy. The broad-based S&P Japan 500 achieved a moderate gain of 3.2% during this period. Developed market equities, as measured by the S&P World, recorded a lower performance of 1.1% in JPY terms, adversely affected by currency fluctuations. Emerging market equities fared better, with the S&P Emerging BMI posting a 2.4% gain, a trend we have not observed for some time (see Exhibit 2).
