S&P Releases 2009 Year End Results for Index Versus Active Fund Scorecard for

Majority of Active Canadian Equity Funds Unable to Outperform the S&P/TSX Composite in 2009

TORONTO, Feb. 25 /CNW/ - Few Canadian equity active funds posted higher returns than the S&P/TSX Composite in 2009, according to the latest results for the Standard & Poor's Indices Versus Active Funds Scorecard (SPIVA) for Canada released today. SPIVA is produced by Standard & Poor's, the world's leading index provider.

In 2009, only 39.2% of Canadian equity active funds beat the S&P/TSX Composite Index. In contrast, 52% of active funds in the Canadian Small/Mid Cap Equity category beat the S&P/TSX SmallCap Index.

Similar to domestic funds, there were mixed results for active funds in the categories with exposure to markets outside of Canada. Almost 52% of the International Equity funds outperformed the S&P EPAC LargeMidCap Index, while only 39.7% of U.S. Equity funds were able to outstrip the S&P 500 in 2009.

"Passive investing provides a cost efficient way to access capital markets," says Jasmit Bhandal, director at S&P Indices in Canada. "For many investors the investment process is quite opaque. In contrast, an indexed approach gives you a transparent, rules-driven framework for investing."

As the average holding period for most investors is well beyond three months, a look at SPIVA's long term numbers will be most relevant for Canadians. Across all categories, the majority of active funds have been unable to exceed the returns of their respective benchmark. In three-year and five-year periods, only 12.5% and 7.45%, respectively, of actively-managed Canadian Equity funds have outperformed the S&P/TSX Composite Index.

SPIVA reports the performance of actively managed Canadian mutual funds corrected for survivorship bias, and shows equal- and asset-weighted peer averages.


Many funds might be liquidated or merged during a period of study, which can skew results. However, for investors making an investment decision at the beginning of the period, these funds are part of the opportunity set. A key advantage of the SPIVA report is its correction for survivorship bias. For example, if there are 100 funds in the beginning of a five-year period and at the end of the period 20 have dropped out or merged leaving 80 left, then this would imply 80% survivorship.


The SPIVA methodology is designed to provide an accurate and objective apples-to-apples comparison of funds' performance versus their appropriate style indices, correcting for factors that have skewed results in previous index-versus-active analyses in the industry. SPIVA scorecards show both asset- and equal-weighted averages and include survivorship bias correction. Fund categorizations are as defined by the Canadian Investment Funds Standards Committee (CIFSC), and fund data is drawn from Fundata's mutual fund database. The complete Year End 2009 SPIVA scorecard for Canada is available on www.spiva.standardandpoors.com.

About S&P Indices

S&P Indices, the world's leading index provider, maintains a wide variety of investable and benchmark indices to meet an array of investor needs. Over $1 trillion is directly indexed to Standard & Poor's family of indices, which includes the S&P 500, the world's most followed stock market index, the S&P Global 1200, a composite index comprised of seven regional and country headline indices, the S&P Global BMI, an index with approximately 11,000 constituents, and the S&P GSCI, the industry's most closely watched commodities index. For more information, please visit www.standardandpoors.com/indices.

About Standard & Poor's

Standard & Poor's, a subsidiary of The McGraw-Hill Companies (NYSE: MHP), is the world's foremost provider of independent credit ratings, indices, risk evaluation, investment research and data. With offices in 23 countries and markets, Standard & Poor's is an essential part of the world's financial infrastructure and has played a leading role for 150 years in providing investors with the independent benchmarks they need to feel more confident about their investment and financial decisions. For more information, visit http://www.standardandpoors.com

SOURCE Standard & Poor's Canadian Index Operations

For further information: For further information: Jasmit Bhandal, Standard & Poor's, (416) 507-3203, jasmit_bhandal@standardandpoors.com; David R. Guarino, Standard & Poor's, (212) 438-1471, dave_guarino@standardandpoors.com

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Standard & Poor's Canadian Index Operations

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