On the go: Just over half of all UK active equity funds have equalled or beaten benchmark returns in the first half of 2020, while 45 per cent trailed behind the S&P UK Broad Market Index.
The data, from the latest iteration of the biannual S&P Indices Versus Active Funds Europe Scorecard, published on Wednesday, showed that 32 per cent underperformed the benchmark over a one-year period and 69 per cent failed to outperform the benchmark over a 10-year period.
The Spiva figures show that UK small-cap fund managers achieved better results than large to mid-cap managers, as 78 per cent outperformed their benchmarks.
The scorecard included its first ever risk-adjusted fund underperformance report, designed to address the claim that active managers can invest with less risk than their benchmarks.
The risk-adjusted fund underperformance report found that 75 per cent of Europe active equity funds had worse risk-adjusted returns than the S&P Europe 350 over the short to medium-term three-year period. For the long-term 10-year period, that figure rose to 88 per cent.
Commenting on the findings, Andrew Innes, head of global research and design at S&P Dow Jones Indices, said: “As the S&P Europe 350 experienced its highest levels of volatility since the 2008 financial crisis and the largest single-month drawdown in almost 20 years, the widely held belief that market volatility should create widespread opportunities for active managers remained unproven.”
Pensions Expert has reported previously on the difficulties substantiating active managers’ claims of outperformance.
Mr Innes added: “Over the first six months of 2020, 42 per cent of active euro-denominated Europe equity funds underperformed the S&P Europe 350. This figure rose to 49 per cent over 12 months, and 87 per cent over 10 years.”
