Active equity managers lag benchmarks: SPIVA

Most active equity managers in Australia underperformed their benchmarks in the first half of 2026, despite market conditions that appeared supportive of stock picking, according to S&P Dow Jones Indices' latest SPIVA Australia Scorecard.

The S&P DJI report found a majority of funds underperformed across every equity category tracked, while Australian bonds were the only asset class where a slim majority of active funds outperformed.

"The first half of 2026 proved challenging for active managers across Australian equity categories," S&P DJI's APAC head of index investment strategy Sue Lee said.

Australian equity general funds were among the weakest performers, with 78% failing to beat the S&P/ASX 200, which gained 2.4% during the period. The average active fund returned 0.2% on an equal-weighted basis and 0.4% on an asset-weighted basis.

If the trend continues, 2026 would record the second highest annual underperformance rate for the category since the scorecard began in 2013. Over 15 years, 89% of Australian equity general funds have underperformed.

Mid- and small-cap managers also struggled with the S&P/ASX Mid-Small Index falling 5.9% compared to average losses of 7.6% for active funds. Some 65% failed to beat the benchmark.

Global equity managers fared better but still lagged, with 58% of funds underperforming the S&P World Index, which gained 5.3%. The average active fund returned 2.7% on an equal-weighted basis.

Australian A-REIT funds also trailed, with 65% underperforming after the S&P/ASX 200 A-REIT Index declined 5.2%.

Australian bonds were the exception, with active funds returning 2.4% on average against a 2.3% benchmark gain, although 44% still underperformed.

Over longer periods, Lee said active funds continued to face "considerable headwinds", with underperformance remaining elevated across all categories.

Fund closures also remained a factor, with liquidation averaging 3% across categories in the first half.