Active Fund Aches: Are Passive ETFs More Profitable? | ETF Trends

The majority of actively managed large-cap managers are underperforming the benchmark S&P 500, adding fuel to the benefits of passively managed, index-based exchange traded funds.

As of June 30, 2015, the SPIVA, or S&P Indices Versus Active, U.S. Scorecard data reveals that 65.3% of large-cap managers underperformed the benchmark S&P 500 index over the past one-year period, writes Aye M. Soe, Senior Director of Index Research & Design for S&P Dow Jones Indices.

The underperformance is even worse when taking a longer point of view. Over the past five- and 10-years, 80.8% and 79.6% of large-cap managers, respectively, failed to outperform the benchmark.

Investors interested in an easy way to track the S&P 500 have a number of options available, including the SPDR S&P 500 ETF (NYSEArca: SPY), iShares Core S&P 500 ETF (NYSEArca: IVV) and Vanguard 500 Index (NYSEArca: VOO).

Mid-cap managers fared slightly better over the one-year period ended June, with 48.2% failing to beat the S&P MidCap 400 Index. Meanwhile, 58.5% of active small-cap funds still fell behind their benchmark.

However, over the longer five- and 10-year periods, the majority of actively managed mid- and small-cap funds underperformed their respective benchmarks, according to S&P Dow Jones Indices.