Active vs Passive: Use SPIVA scorecards to make better decisions
listen now
About This Episode
Over the last couple of episodes, we’ve been exploring different aspects of index-based investing from the principles of evidence-based investing and how you can apply those principles to your portfolio, to the history of the indexing revolution.
Today, we’re taking a deep dive into the numbers by looking at the annual SPIVA reports which compare the performance of actively managed strategies versus indices all around the world – active vs passive investing.
This is where our advocacy for index-based investing is rooted – in the data which shows that indexing offers a consistently better opportunity for you to meet your future financial goals.
On this episode, Ruben and I talk about what the data says about investing with active managers versus indices. We break down where you can find reports on these statistics, which metrics are measured, what those numbers mean for you as an investor, why you’re better off investing in asset classes rather than managers, how our model differs from other advisors, and so much more!
Thank you for listening!
Key Topics:
- What we can learn from the SPIVA reports (2:01)
- Lessons from rugby about the advantages of objective scorekeeping (3:04)
- The markets which are represented in SPIVA reports (5:45)
- Key performance results from the SPIVA reports (6:35)
- The areas being measured in these scorecards (8:04)
- Active managers’ average performance against the benchmarks (9:08)
- Why active managers don’t necessarily have an advantage in a bear market (10:38)
- How active managers performed during the 2008 economic crisis (12:43)
- Refuting the idea that indexing only works for large-company stocks (13:54)
- Why people think they can pick winning investment strategies (17:07)
- What the data shows about the long-term performance of top-ranking active managers (18:58)
- My experience as a bond trader selecting mutual funds in the early 90s (20:06)
- The pricing issue when buying into a top-performing fund (21:19)
- Why active funds tend to underperform (21:59)
- The reasons why some investors are still choosing active managers (24:25)
- How our model differs from other managers (25:14)
- Why I believe we’re reaching a tipping point in Canada (26:06)
- But what about Warren Buffett? (27:10)
- Our key takeaways that will benefit you as an empowered investor (28:38)
Thanks for Listening!
Be sure to subscribe on Apple, Google, Spotify, or wherever you get your podcasts. And feel free to drop us a line at lawrence@tma-invest.com or 514-695-0096 ext.112
Follow Tulett, Matthews & Associates on social media on LinkedIn, Facebook, and more!
Follow The Empowered Investor on Facebook, LinkedIn, and Instagram
Related Episodes

2022 Financial Year in Review and Looking Ahead for 2023
Investors who maintained perspective and long-term discipline by committing to a fundamentally sound investment plan were able to weather through the periods of market uncertainty and stay on the path to building wealth.

Are rising interest rates a curse or a blessing?
2022 has been a challenging year for Canadian investors; inflation is higher, interest rates have been going up, bonds are down, and stocks have been volatile. Typically, bonds have sheltered investors in periods of uncertainty. This hasn’t been the case this year.

Managing your Investment Portfolio Through a Recession
We discuss the looming possibility of a recession and how you can successfully manage your investment portfolio through uncertain financial times.
Stay up to date with the latest episodes and posts
Follow Us

Connect
Visit Us
3535 St-Charles Blvd.
Suite 703
Kirkland, Quebec
H9H 5B9
Connect
© Copyright 2023 | Tulett, Matthews & Associates Conflict of Interest Disclosure Privacy Policy Legal