With the exception of small cap funds, many actively managed mutual funds are struggling to beat their respective benchmarks, according to Standard & Poor’s Indices Versus Active Funds (SPIVA) Australia Scorecard.
The S&P/ASX 200 Accumulation Index has outperformed approximately 70 per cent of active Australian equity general funds over the past five years, and around 77 per cent over the last year.
"Efficiency within the large cap equity market will see this stock universe remain a challenging space for Australian managers, particularly as financials and resources based sectors represent a significant component within the S&P/ASX 50," said Guy Maguire, head of S&P Indices in Australia.
However, at least 70 per cent of all active small-cap funds beat their relative benchmark over a five year period, with year-to-date this outperformance of the S&P/ASX Small Ordinaries at approximately 95 per cent, according to S&P Indices.
The strong Australian dollar has caused difficulties for international equity managers, meaning the MSCI World Accumulation Index outperformed around four in five actively managed international equity funds, according to SPIVA.
