Do active managers actually beat the index?

Over the fifteen years ending December 2024, 89.5% of actively managed US large-cap equity funds failed to beat the S&P 500, according to S&P Dow Jones Indices' SPIVA US Year-End 2024 Scorecard. Over ten years the figure was 84.3%; even across the single calendar year 2024, 65.2% underperformed. Consistent index-beating is rare — rare enough that buying the index is the correct default for most people. But the statistic everyone quotes hides a second problem that matters more when you are judging a manager who claims to be an exception: you usually cannot verify the claim. The sensible response is not to hunt for the rare winner, but to refuse to believe anyone whose record you cannot independently check.

Why this is the question that matters

Most people meet the active-versus-passive debate as a choice about returns. It is really a choice about evidence. A manager who says they beat the market is describing an outcome you did not witness, over a period they chose, in an account you cannot see. If you cannot check it, a claim of skill is indistinguishable from luck, a flattering start date, or selective memory. The rarity data tells you the prior should be sceptical; the verification problem tells you why a return figure alone should never move it.

How often do active managers actually beat the index?

Rarely, and less often the longer you look. The SPIVA US Year-End 2024 Scorecard measured active US large-cap funds against the S&P 500 over three horizons:

Period to end-2024	Active funds that underperformed the S&P 500
1 year	65.24%
10 years	84.34%
15 years	89.50%

The direction is the point. Over one year, roughly a third of managers beat the index; over fifteen, about one in ten do. Two forces widen the gap as the horizon lengthens: cost compounds every year a fund charges it, and luck washes out, so a single strong year rarely repeats. That is why a short winning streak is weak evidence — it is exactly what chance produces at scale across thousands of funds.

If outperformance is real, how would you know?

You would need a record you can inspect without asking permission. The common distortions all hide in the parts of a record you are not shown: a backtest presented as a result, the highlights without the losing trades, a start date moved to just after a bad stretch, a benchmark quietly dropped in the years it was lost to. Each of these turns an ordinary or poor record into an impressive-sounding claim, and none of them survives a complete, dated, benchmarked history that a stranger can read in full. Verifiability, not the headline number, is what separates evidence from a story.

What a checkable record looks like

This portfolio is built to pass that test rather than to make a claim. It has traded on eToro in public since August 2020, with every position and every trade visible and nothing editable after the fact, benchmarked against the S&P 500 on the portfolio page so the comparison is there to read rather than asserted here. Every full calendar year since inception has closed in profit, including 2022, when the S&P 500 returned −18.1% — a year that is itself part of the record, not omitted from it. The strategy runs with no leverage, no short selling and no derivatives, and more than 4,500 people copy it. The relevant fact is not that these numbers are good; it is that you do not have to take my word for any of them.

The honest case for just buying the index

For most people, an index fund is the right choice, and nothing above argues otherwise. It costs less, removes the need to evaluate any manager, and sidesteps the risk that the one you picked is in the 89.5%. Six years is also a short sample: a record that has beaten a benchmark since 2020 could still owe part of that to luck, and survivorship bias applies to me exactly as it does to any fund currently ahead — the ones that fell behind simply stopped being discussed. Past performance is not a promise of future results. The only way to tell skill from a lucky run is a longer record kept in the open, which is precisely why this one stays public and benchmarked rather than summarised.

What would change the conclusion

If the portfolio stops beating its benchmark across a full market cycle — not a single quarter, but a peak-to-trough-to-recovery stretch — then the passive default has won for this account too, and the public record will say so without my help. What I watch is performance against the S&P 500 through the next drawdown rather than the next rally, because falling less is where an active, cash-flow-driven approach either earns its keep or doesn't. The test keeps running in public; that is the whole design.

If you want the practical version of this — the specific things to check before trusting any record — it is set out in how to verify an investor's track record. The investment philosophy explains the approach the portfolio actually runs on, and the portfolio that more than 4,500 people copy is public in full.