Active Canadian Equity funds underperform S&P/TSX Composite
TORONTO, June 4 /CNW/ - Standard & Poor's, the world's leading index
provider, announced today the latest results for the Standard & Poor's Indices
Versus Active Funds Scorecard (SPIVA) for Canada. For the first quarter of
2009, only 27.4% of Canadian Equity active funds outperformed the S&P/TSX
Composite Index. However, 70.4% of active funds in the Small/Mid Cap Equity
category beat the S&P/TSX Completion Index. Similarly, in the Canadian Focused
Equity category 76.9% of active funds outperformed the blended benchmark of
50% S&P/TSX Composite + 25% S&P 500 + 25% S&P EPAC LargeMidCap Index.
"The mixed results for the most recent quarter when large cap and
dividend funds lagged the indices while small cap, international and Canadian
focused lead the indices may reflect the recent market turmoil. The track
record for a year or longer confirms that the indices lead a majority of the
actively managed funds," commented David M. Blitzer, Managing Director and
Chairman of the S&P/TSX Canada Index Committee. "Consistently successful stock
picking is very difficult."
SPIVA reports the performance of actively managed Canadian mutual funds
corrected for survivorship bias, and shows equal- and asset-weighted peer
SPIVA results for the first quarter of 2009 showed that the majority of
active mutual funds investing outside of Canada were able to outperform their
benchmarks. 56.6% of active U.S. Equity funds outperformed the S&P 500, 73.3%
of International Equity funds outperformed the S&P EPAC LargeMidCap Index and
82.0% of Global Equity funds outperformed the S&P Developed LargeMidCap Index.
The majority of active funds underperformed their respective Standard &
Poor's benchmark over one-, three- and five-year periods. Only 46.0%, 24.7%
and 8.4% respectively, of active Canadian Equity funds were able to outperform
the S&P/TSX Composite Index over these periods. For active funds in the U.S.
Equity category, 28.2%, 17.2% and 11.0% of funds outpaced the blended S&P/TSX
Composite benchmark index over the one, three- and five-year periods
SPIVA reports also include a survivorship bias correction to account for
funds that may have merged or been liquidated during the period under study.
Survivorship over the past five-years is 44.9% for Canadian Equity, 41.1% for
U.S. Equity, 58.7% for International Equity, and 42.2% for Global Equity. In
other words, a significant percentage of the funds in these four categories
has been merged or liquidated over the past five years.
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 to
account for funds that may have merged or been liquidated during the period
under study. 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 Q1 2009 SPIVA scorecard for Canada is available on
About Standard & Poor's Index Services
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