Executive summary

The arguments for and against active and passive management are much more nuanced than are often suggested by proponents on either side. In this report we review the hard facts as represented by the S&P Index Versus Active (SPIVA) data which farrelly’s views as the definitive database on active management.

• The data supports Bill Sharpe’s Iron Law of Active Management - In 1991, Bill Sharpe laid out the logic that active management will, on average, produce returns equal to the index less fees and costs. The SPIVA data strongly supports that contention.

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