Index beats active funds over the long term
Index benchmarks have outperformed the majority of actively managed funds across both equity and bond fund categories over a five-year horizon, according to the latest SPIVA Scorecard.
However, the Standard & Poor’s (S&P’s) Index Versus Active Funds (SPIVA) Scorecard for Australia to year-end 2009 also showed that the majority of active funds outperformed the index over shorter timeframes, such as during the strong global equity market rebound in 2009.
“Active equity funds enjoyed a positive year over the course of 2009, with a very large portion of Australian equity small-cap and international equity funds outperforming their respective benchmark indices,” said S&P Index Services director of research and design Simon Karaban. “This is a positive result for active funds over the short term, however a majority of active funds still failed to beat the benchmark over a five-year period.”
The SPIVA Scorecard also revealed that in the last five years the S&P/ASX 200 index outperformed 62.87 per cent of active Australian equity funds and the UBS Composite 0+Y Bond Index outperformed 89.66 per cent of actively managed Australian bond funds.
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