SPIVA full-year data shows most Canadian active funds lagging benchmarks across time horizons
A new report from S&P Dow Jones Indices suggests that Canada’s active fund managers continue to face an uphill battle against index benchmarks, with most strategies falling short across multiple time horizons.
The latest SPIVA Canada Scorecard, which tracks actively managed funds against their respective market benchmarks, found that a large majority of Canadian funds underperformed during the full year ending December 31, 2025. The study covers multiple segments of the market including domestic, U.S., global and international equity strategies.
Canadian equity strategies again struggled to keep pace with the broader market. The S&P/TSX Composite Index rose 31.7% in 2025, while actively managed Canadian equity funds returned roughly 22.1% on an equal-weighted basis and 22.7% when weighted by assets.
As a result, 93.4% of Canadian equity funds underperformed the benchmark over the one-year period. The picture remained similarly challenging over longer horizons, with underperformance rates climbing to 96.3% over three years, 95.9% over five years and 98.8% over 10 years.
Funds focused more narrowly on Canadian equities also struggled. Around 93.1% of Canadian focused equity funds failed to beat their blended benchmark in 2025, which combines the S&P/TSX Composite, S&P 500 and S&P EPAC LargeMidCap indices.
Dividend-oriented strategies showed somewhat stronger relative performance. Canadian dividend and income equity funds posted one of the lowest short-term underperformance rates among the groups examined, with 44.2% falling behind their benchmark over the one-year period. The S&P/TSX Canadian Dividend Aristocrats Index gained 19.1% during the year.
However, their longer-term results still deteriorated sharply. Over periods ranging from three to 10 years, the share of funds lagging the benchmark rose above 85% across several timeframes.
Small- and mid-cap managers faced an even steeper challenge. The S&P/TSX Completion Index surged 42.5% during 2025, while 100% of Canadian small- and mid-cap equity funds underperformed that benchmark.
The pattern extended beyond domestic markets. Among funds investing in U.S. equities, 89.1% lagged the S&P 500 over the year. Over longer horizons, the majority of these funds also trailed the benchmark, with underperformance rates reaching 85.8% over three years, 100% over five years and 97.1% over 10 years.
International and global equity funds delivered similar results. Nearly 94.7% of international equity funds underperformed the S&P EPAC LargeMidCap benchmark in 2025.
Global equity funds also struggled to keep pace with the market. While the S&P World Index gained 16.3% during the year, actively managed global equity funds returned around 11% on average, leaving 83.3% of funds trailing the benchmark.
The report also highlights structural pressures within the active fund universe. Over the past decade, 47.1% of Canadian equity funds either merged or were liquidated, while roughly 39.3% of funds disappeared across all categories during that period.
For investors and advisors navigating the active versus passive debate, the findings reinforce a long-running trend. Since the SPIVA scorecards began tracking fund performance more than two decades ago, actively managed strategies have frequently struggled to consistently outperform their benchmark indexes.
The latest Canadian data suggests that, at least for now, the challenge of beating the market remains as difficult as ever.
