European ETFs beat active counterparts
Exchange traded funds (ETFs) have outperformed their active counterparts when it comes to European funds over the past year, according to data.
According to FE Analytics data, within the Australian Core Strategies universe, there were eight funds focused on Europe with five being ETFs and three being actively-managed funds.
Over one year to 30 April, 2020, all five ETFs had outperformed the active funds in the sector although all funds in the sector reported negative returns over the period.
The best-performing funds were Vanguard FTSE Europe Shares ETF (-8.7%), UBS IQ MSCI Europe Ethical ETF (-9.1%) and ETFS Eurostoxx 50 ETF (-11.8%). All of these funds reported better performance than the average sector returns which was a loss of 12.6%.
The remaining ETFs were BetaShares FTSE 100 ETF and BetaShares WisdomTree Europe ETF Currency Hedged which lost 12.9% and 14.5% respectively over one year.
Performance of five European ETFs versus European sector over one year to 30 April
The three actively-managed funds were Platinum European P and Platinum European C which lost 15.6% and 15.8% and Pendal European Share which lost 16.9%.
Performance of three European active funds versus European sector over one year to 30 April
However, the Pendal fund went from worst-performing fund over one year to best-performing fund since the start of 2020. From the start of 2020 to 30 April, 2020, the Pendal European Share fund lost 12.9% compared to average sector losses of 17%.
It was not a complete active/passive reversal though as the two Platinum funds remained at the bottom of the list with both reporting losses of 20% since the start of 2020 to 30 April.
In its factsheet, the Pendal European fund said it benefitted from having minimal exposure to financials which underperformed heavily and the exit of its exposure to Royal Dutch Shell in favour of French firm Schneider Electric.
“We remain meaningfully invested for the cycle upturn as this crisis is finite. Also underestimated, we believe, is that governments, who imposed this recession, will help to sustain industry and employment capacity through this sharp economic downturn,” it said.
“This intervention will come through the transfer of labour costs and the provision of liquidity and temporarily less restrictive credit regulations.”
AUTHOR
Laura Dew
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