Active Canadian equity managers add value in Q4 2008
TORONTO, Feb. 3 /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 fourth quarter of
2008, 53.2% of Canadian Equity active funds outperformed the S&P/TSX Composite
Index. Also, 53.7 % of active funds in the Small/Mid Cap Equity category beat
the S&P/TSX Completion Index. In contrast, in the Canadian Focused Equity
category only 25.3% of active funds outperformed the blended benchmark of 50%
S&P/TSX Composite + 25% S&P 500 + 25% S&P EPAC LargeMidCap Index.
"This quarter's results show a great deal of disparity between active
fund performance of domestic equity versus non-domestic equity categories,"
says Jasmit Bhandal, director at Standard & Poor's. "The majority of active
funds in the Canadian Equity categories have been able to add value during a
difficult fourth quarter, while the opposite is true for active funds
investing outside of Canada."
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 fourth quarter of 2008 showed that the majority of
active mutual funds investing outside of Canada were unable to keep pace with
their benchmarks. Only 36.7% of active U.S. Equity funds outperformed the S&P
500, 21.3% of International Equity funds outperformed the S&P EPAC LargeMidCap
Index and only 25.2% of Global Equity funds outperformed the S&P Developed
The majority of active funds underperformed their respective S&P
benchmark over one, three- and five-year periods. Only 41.9%, 21.0% and 11.2%
respectively, of active Canadian Equity funds were able to outperform the
S&P/TSX Composite Index over these periods respectively. For active funds in
the Canadian Focused Equity category, 34.6%, 26.2% and 42.9% of funds outpaced
the blended S&P/TSX Composite benchmark index over the one, three- and
five-year periods respectively.
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, 42.5% for
U.S. equity, 62.1% for international equity, and 43.3% 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 Q4 2008 SPIVA scorecard for Canada is available on
About Standard & Poor's Index Services
Standard & Poor's Index Services, the world's leading index provider,
maintains a wide variety of investable and benchmark indices to meet an array
of investor needs. Its family of indices includes the S&P 500, an index with
$1.5 trillion invested and $4.85 trillion benchmarked, and the S&P Global
1200, a composite index comprised of seven regional and country headline
indices. For more information, please visit www.standardandpoors.com/indices.
About Standard & Poor's
Standard & Poor's, a division of The McGraw-Hill Companies (NYSE: MHP), is
the world's foremost provider of financial market intelligence, including
independent credit ratings, indices, risk evaluation, investment research and
data. With approximately 8,500 employees, including wholly owned affiliates,
located 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 more
than 140 years in providing investors with the independent benchmarks they
need to feel more confident about their investment and financial decisions.
For more information, visit www.standardandpoors.com.
For further information:
For further information: Jasmit Bhandal, Standard & Poor's, (416)
507-3203, email@example.com; David R. Guarino, Standard &
Poor's, (212) 438-1471, firstname.lastname@example.org