Last updated: October 25, 2026 · Refresh cadence: QUARTERLY · Trend tracking starts with this edition except where a prior-period figure is shown.
Fund Manager Research Costs & Selection Evidence — Market Data
Manager selection is the most expensive research problem in investing, and the evidence on whether it pays is unusually blunt. Year after year, most active funds trail the benchmark they charge to beat — and the longer the horizon, the worse the record looks. That record is the reason research budgets, not just fund fees, belong in the cost conversation.
This page puts the selection evidence next to the research-spending evidence. The SPIVA scorecard counts how many funds beat their benchmarks. The CFA Institute surveys record what happened to research itself when regulation forced its price into the open. Both series point the same way: selection is hard, and the research behind it is getting thinner in exactly the corners where it might matter most.
SPIVA U.S. Scorecard, year-end 2024 — share of active funds underperforming
| Figure | Value | Trend vs prior period | Source |
|---|---|---|---|
| All large-cap vs S&P 500 | 65.2% underperformed over 1 year; 76.3% over 5 years; 84.3% over 10 years | Period-end figures; longer horizons show higher underperformance ● Baseline (October 2026) | S&P Dow Jones Indices SPIVA U.S. Scorecard YE 2024, via ICFS summary |
| All mid-cap vs S&P MidCap 400 | 62.0% over 1 year; 80.0% over 5 years; 77.3% over 10 years | Period-end figures ● Baseline (October 2026) | S&P Dow Jones Indices SPIVA U.S. Scorecard YE 2024, via ICFS summary |
| All small-cap vs S&P SmallCap 600 | 29.7% over 1 year; 60.4% over 5 years; 82.2% over 10 years | Period-end figures ● Baseline (October 2026) | S&P Dow Jones Indices SPIVA U.S. Scorecard YE 2024, via ICFS summary |
| International (ex-U.S.) vs S&P World Ex-U.S. | 69.0% over 1 year; 81.5% over 5 years; 85.3% over 10 years | Period-end figures ● Baseline (October 2026) | S&P Dow Jones Indices SPIVA U.S. Scorecard YE 2024, via ICFS summary |
| Emerging markets vs S&P/IFCI Composite | 71.5% over 1 year; 75.2% over 5 years; 87.4% over 10 years | Period-end figures ● Baseline (October 2026) | S&P Dow Jones Indices SPIVA U.S. Scorecard YE 2024, via ICFS summary |
| 15-year horizon | No equity or fixed-income category showed majority active outperformance; large-cap underperformance exceeded 90% | Longest horizon published ● Baseline (October 2026) | S&P Dow Jones Indices SPIVA U.S. Scorecard YE 2024, via ICFS summary |
| Survivorship, 20 years to 2024 | 48.5% of domestic funds survived the full period; of survivors, 94.1% underperformed the S&P 1500 Composite over 2005–2024 | Full-period figures ● Baseline (October 2026) | SPIVA data, via Applied Wealth Management summary |
What research itself costs — and the counterargument
| Figure | Value | Trend vs prior period | Source |
|---|---|---|---|
| Equity mutual fund manager expenses, 1980 vs 2010 | $170.8 million (1980) rising to $24,143 million (2010) — a 141-fold increase, outpacing fund-size growth | Prior: 1980 base year ▲ Up 141x over 30 years | CFA Institute Research Digest summary of asset-management fee research |
| CFA Institute MiFID II survey (about 500 European professionals) | In the year after MiFID II, research budgets fell, research providers consolidated, coverage shrank — particularly in small- and mid-cap equities — and sell-side analyst numbers fell | Survey compared pre- and post-MiFID II conditions ▼ Research budgets and coverage fell | CFA Institute press release on MiFID II survey |
| Counterpoint: Cremers, Fulkerson & Riley (2026) on SPIVA | After asset-weighting, using actual passive funds instead of indexes, and crediting defunct funds that outperformed before closing: 56% of assets (not 92% of funds) underperformed over 20 years to 2024; 55% of assets over the same span in the paper's headline summary | Re-analysis of the same SPIVA dataset ● Method dispute — read both | Cremers, Fulkerson & Riley (2026), via Morningstar coverage |
| Estimated cost of manager-selection changes (study summarized by CFA Institute) | More than $170 billion in underperformance before transaction costs, from institutional investors' manager allocation changes on average across asset classes | No prior-period figure from the same source ● Baseline (October 2026) | Study summarized in CFA Institute Research and Policy Center discussion of Scott Stewart's monograph |
Methodology
Included: SPIVA year-end 2024 scorecard figures as republished in public summaries, CFA Institute survey findings, and the published academic critique of SPIVA methodology. Excluded: any single manager's track record and any paywalled consultant database. SPIVA counts funds equally, not dollars — the Cremers critique is included precisely because that choice changes the answer, and readers should weigh both framings before drawing conclusions about manager selection.
Trend labels: “Baseline (October 2026) — trend tracking starts with the next refresh” means no prior-period figure from the same source was available this session, so no movement is claimed. Where a prior figure is shown, the trend compares the current figure with that prior figure from the same source.
Disclaimer
Figures on this page are aggregated public estimates compiled for information only. They are not investment advice, professional advice, or an offer to buy or sell any security or asset. Figures change as sources revise or republish them; verify any figure against its linked source before relying on it.
This domain is offered by Prime Domain Capital. Contact only at info@primedomaincapital.com.
Changelog
- October 2026: First edition, published as a staged page. Figures compiled from the public sources listed in SOURCES.md, with trend indicators and baseline labels as shown above. Next refresh follows the QUARTERLY cadence in SOURCES.md; the sitemap lastmod for this page is to be updated on every refresh once deployed.