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7 Active vs. Passive Asset Management: An Update made considerable improvements in their ability to deliver alpha over the last three years. On the other hand, domestic Large Cap Growth category has experienced one of the largest declines in the proportion of positive alpha managers over the last three years. In fact, their current positive alpha manager proportion is only 9 percent. These results make intuitive sense, as , excluding the most recent market downturn, Growth stocks have done exceedingly well, which makes it more difficult for managers to outperform passive benchmarks. Table 3 Description of time trends (last 3, 5, and 10 years) in changes of the "Manager success rate" and "Manager failure rate" in various peergroups. "AVG" or "average" refers to the "whole sample results" discussed in Section 3 (see Table 2), and "CUR" or "current" refers the results from the most recent period in our rolling period trend analysis. 3-year change 5-year change 10-year change MORNINGSTAR CATEGORY Mgr. failure rate (avg.) Mgr. success rate (avg.) Type (avg.) Mgr. failure rate (curren) Mgr. success rate (curren) Potential switch Mgr. failure rate (current) Mgr. success rate (current) Mgr. failure rate (current) Mgr. success rate (current) Mgr. failure rate (current) Mgr. success rate (current) COMMODITIES 32 38 A 4 55 - -35 15 -28 -3 -6 7 Emerging Markets 51 39 A 36 49 - -22 25 -10 5 -5 -1 FOREIGN LCG 42 47 A 39 47 - 0 6 3 -2 2 4 FOREIGN LCV 42 44 A 19 65 - -45 53 -16 20 -36 38 FOREIGN S/M C 41 34 A 24 47 - -26 12 -1 -1 13 -33 FOREIGN S/M G 6 87 A 26 42 - 16 -17 9 -10 13 -21 FOREIGN S/M V 37 36 A 6 69 - -19 22 -3 25 -32 31 Large Cap Growth 59 34 A 83 9 P 19 -17 1 -3 -1 0 Mid Cap Growth 56 33 A 28 62 - -28 27 -30 39 -35 33 Small Cap Core 38 54 A 25 69 - -47 46 -18 30 1 4 Small Cap Growth 26 66 A 1 88 - -22 27 -48 52 -31 28 Small Cap Value 39 44 A 32 54 - -40 39 -19 20 31 -33 REAL ESTATE 39 40 A 16 68 - -14 21 -29 25 -39 62 FOREIGN LCC 59 32 N 47 43 A -21 24 22 -19 -6 4 High Yield 63 27 N 46 46 A -20 22 -10 14 -18 22 Large Cap Value 64 28 N 31 59 A -19 20 -33 33 -24 22 BANK LOAN 78 9 P 80 4 - -2 -2 14 -15 36 -42 EM BOND 67 18 P 38 45 A -11 8 -50 42 -25 36 INTER TERM BOND 72 18 P 39 50 A -5 11 -6 16 18 -22 Large Cap Core 74 21 P 66 25 - -3 2 -10 8 -11 10 Mid Cap Core 68 21 P 60 29 N -1 3 -7 5 -16 13 Mid Cap Value 67 21 P 45 42 A -6 11 -24 17 -25 32 MUNI NAT'L INT. 82 9 P 49 36 A -21 24 -18 19 -12 14 MUNI NAT'L L 86 8 P 52 36 A -6 3 31 -20 13 0 MUNI NAT'L S 80 14 P 51 23 N -14 8 -13 -3 10 -14 TIPS 69 16 P 37 37 A -4 18 -44 33 4 -10