Core Viewpoint - The article presents a comparative analysis of the performance of active and passive funds in China's A-share market, indicating that while over half of active equity funds outperformed passive funds in the long term, this trend has reversed in the short term, with less than 20% of active funds beating passive counterparts in the last year [1][9]. Methodology Changes - The report introduces two key adjustments in measuring the performance of active funds against passive benchmarks: switching from equal-weighted to asset-weighted calculations and adopting a buy-and-hold method to reflect the actual returns for investors [6][8]. Performance Analysis - As of the end of 2024, only 13.4% of active equity funds outperformed the asset-weighted average return of passive funds, a significant drop of 52 percentage points from 2023 [9]. - The performance of active large-cap balanced equity funds has notably declined, with only 19.2% surpassing the asset-weighted average return of passive funds in the last year, down from 50% in 2023 [11]. - Active large-cap growth equity funds saw a dramatic decrease in their victory rate to 9.7% in 2024 from 70.4% in 2023, primarily due to underperformance in sectors like technology [12]. - Active small-cap equity funds had a victory rate of 38.2% in 2024, which, while lower than 49.6% in 2023, remains the highest among the three fund categories analyzed [13]. Long-term Survival Rates - Active funds consistently demonstrate higher long-term survival rates compared to passive funds, with ten-year survival rates for active large-cap balanced and small-cap equity funds remaining below 5%, while passive funds range from 12% to 38% [14][15]. Excess Return Distribution - The distribution of ten-year excess returns shows that most surviving active funds achieved positive and significant excess returns, indicating a higher probability for investors to select successful active funds [16]. Market Characteristics - The A-share market in 2024 exhibited significant structural characteristics, with value stocks outperforming growth stocks, as evidenced by the 23.1% increase in the value index compared to a mere 6.0% rise in the growth index [9][10].