However, as the SPIVA Scorecard shows, 77.88% of actively managed small cap funds underperform the S&P SmallCap 600 over the past five years.
If we go back further, say to the end of 2006, we can see that nothing much has changed. Over the five year period ending December 31, 2006, 76.47% of small cap managers underperformed the benchmark.
This, of course, poses an interesting question of how much of the Efficient Market Hypothesis has been wrongly used to propel the myth of active investing for small cap equity.
Aye M. Soe is director, index research and design, at S&P Dow Jones Indices. This post was republished with permission from Indexology, a blog published by S&P Dow Jones Indices. The posts on the Indexology blog are opinions, not advice. Please read its