Swedroe: Europe’s SPIVA Results Are Nothing New

April 19, 2017

Earlier this week, I provided some highlights of from the S&P Dow Jones Indices Versus Active (SPIVA) 2016 U.S. Scorecard. Today we’ll look at the SPIVA Europe Scorecard, which compares the performance of actively managed equity funds to their appropriate index benchmarks.

The year-end 2016 Scorecard provides us with 10-year data. While not surprising to those familiar with the U.S. Scorecard, the results should be depressing for investors who believe that active strategies are likely to outperform.

Active Underperformance
The data below show the percentage of actively managed funds that were outperformed by their respective benchmarks during the most recent 10-year period. The results are based on euro-denominated returns.

  • Eighty-eight percent of eurozone actively managed equity funds underperformed the S&P Europe 350 Index (350 leading blue chip companies drawn from 16 developed European markets). On an equal-weighted basis, active funds underperformed by 1.23 percentage points. On an asset-weighted basis, active funds underperformed by 1.17 percentage points.
  • Ninety percent of eurozone actively managed equity funds underperformed the S&P Eurozone BMI (Broad Market Index), a comprehensive benchmark that includes large-, mid- and small-cap stocks from developed and emerging eurozone countries. On an equal-weighted basis, active funds underperformed by 1.15 percentage points. On an asset-weighted basis, active funds underperformed by 1.34 percentage points.
  • Seventy-six percent of Nordic actively managed equity funds underperformed the S&P Nordic BMI (representing the Swedish, Danish, Norwegian and Finnish stock markets). On an equal-weighted basis, active funds underperformed by 0.12 percentage points. On an asset-weighted basis, active funds underperformed by 0.6 percentage points.
  • Ninety-eight percent of actively managed global equity funds underperformed the S&P Global 1200 Index. On an equal-weighted basis, active funds underperformed by 3.56 percentage points. On an asset-weighted basis, active funds underperformed by 3.17 percentage points.

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