The latest SPIVA Australia Mid-Year 2025 Scorecard showed active fund managers have faced a challenging first half, with global equity and Australian real estate investment trust (A-REIT) funds delivering relative outperformance, while domestic equity managers lag benchmarks.
The scorecard revealed that 71 per cent of Australian equity general funds underperformed the S&P/ASX 200 in the first half of 2025, despite the index gaining 6.4 per cent.
On an asset-weighted basis, these funds only returned 4.5 per cent, while 85 per cent of funds in this category failed to beat the benchmark over 15 years.
By contrast, global equity general funds recorded their lowest underperformance rate in recent years, with 54 per cent falling short of the S&P World Index (AUD), compared to the long-term average underperformance of 71 per cent.
However, the scorecard noted that underperformance rates have climbed steadily to 96 per cent across 15 years.
The report further highlighted the impact of a weakening US dollar and US equity underperformance, which has created opportunities for global managers.
“Active funds in the Global Equity General category, which has the largest number of available funds, recorded a slim majority (54 per cent) of underperformance, significantly lower than its long-term average of 71 per cent,” the report stated.
Meanwhile, A-REIT funds performed generally well with the S&P/ASX 200 A-REIT index gaining 6 per cent during the period, while actively managed funds returned 7.1 per cent.
While only half of these funds underperformed, the long-term picture looks less favourable, with 85 per cent failing to beat benchmarks over a 15-year period.
Mid- and small-cap equity managers also struggled, with 63 per cent underperforming despite the S&P/ASX Mid-Small rising 6.8 per cent. While this category posted the lowest long-term underperformance rates, 58 per cent still lagged behind.
Bond managers experienced more difficult conditions, with 46 per cent of funds falling behind the S&P/ASX iBoxx Australian Fixed Interest 0+ Index, which posted a 4 per cent return.
This marked a deterioration from 2023 and 2024, when the majority of active managers outperformed, according to the scorecard. Over 10 and 15 years, underperformance rates increased to 67 per cent and 76 per cent, respectively.
Across all categories, fund survivorship remained relatively high in the first half of the year, with just 2 per cent of funds liquidated; however, it’s expected that more than half of all funds will merge or close over the next 15 years.
