S&P scorecard: Active U.S. funds rarely stay top

The S&P Persistence Scorecard found fewer than 1% of U.S. domestic equity funds, including mutual funds and ETFs domiciled in the United States, remained in the top quartile of their peer groups for five consecutive years. The scorecard tracked fund performance through December 2025.

Of the funds ranked in the top quartile in 2021, 0.46% remained there over the full five-year span. The data covers the full U.S. fund universe and shows frequent mean reversion: funds that led their categories in one period often fell into the bottom half in later years.

Smaller-cap categories produced starker results. No midcap fund that was in the top quartile in 2021 remained there by the end of the five-year period, and small-cap groups showed similar lack of durability.

The persistence findings have affected how advisors assess active strategies and fees. The report’s results have been cited in discussions about whether higher fees for active managers are justified when long-term outperformance is rare.

Market flows in 2026 reflected these data points. S&P 500–linked ETFs captured a significant share of inflows in the first half of the year, while the industry also recorded a high number of active ETF launches. Although some active ETFs are chosen for tax efficiency, their historical persistence was similar to active mutual funds.

Market volatility in early 2026 coincided with increased demand for broad-market, low-cost ETFs. The scorecard’s near-zero persistence figures in several categories corresponded with advisors reducing manager risk in client portfolios and increasing core passive allocations.

Advisors are using the Persistence Scorecard alongside flow data when evaluating mutual funds and ETFs. The combination of performance persistence metrics and 2026 flow patterns has correlated with larger allocations to passive S&P 500 vehicles.