Active Managers Underperform S&P 500 as 79% Lag Index in 2025

Individual investors avoid the burden of picking winners by holding index ETFs. In 2025, the Vanguard S&P 500 ETF gained 17.8%, while 79% of U.S. large-cap active managers underperformed the S&P 500. This follows a 2024 performance where 65% of U.S. large-cap active managers lagged the index. 2025 was the fourth-worst year for active managers lagging the S&P 500 since S&P Dow Jones Indices began tracking the data in 2002. Professional investors select individual equities to beat benchmarks, yet active managers underperform broad market index funds like the Vanguard S&P 500 ETF (VOO).