Most stock-picking pros underperformed in 2025's market rollercoaster 🫤
New data confirms this persistent trend 📊
It remains tough to generate returns in the stock market that beat (or outperform) a passively managed fund tracking the S&P 500.
According to new data from S&P Dow Jones Indices (SPDJI), 79% of U.S. large-cap equity fund managers underperformed the S&P 500 in 2025. It was the fourth-worst year for these managers in the report’s 25-year history.
“Market regimes characterized by benchmark declines and high volatility are supposedly those in which active managers should shine,” SPDJI’s Anu Ganti said. “The early part of the year provided such an auspicious backdrop, with sharp swings in U.S. equities and the S&P 500’s slide into correction territory as tariff-related jitters took hold of the market. Still, possibly due to the remarkable recovery of large caps, 2025 was the worst year for large-cap active equity performance since 2021.”
This was the 16th consecutive year in which the majority of fund managers in this category have lagged the index.
And as you stretch the time horizon, the numbers get even more dismal. Over three years, 67% underperformed the S&P 500. Over five years, 89% underperformed. And over 20 years, 93% underperformed.
To be fair, the goal of every fund manager and investor isn’t necessarily to beat some benchmark. Nevertheless, for active investors, seeing a low-cost index fund consistently outperforming may be disheartening.
