However, the Mid-Year 2015 Europe S&P Indices Versus Active Funds Scorecard for Europe found that performance dwindled over longer periods, with 52% and 73% of active UK equity managers trailing their benchmark over 5 and 10 years respectively.
The report found that UK Large-/Mid-Cap Equity fund managers did best with 92% of actively managed funds beating the S&P UK LargeMidCap Index over a one-year period. However, over 10 years, 73% of them underperformed their benchmark. UK Small-Cap-Equity funds delivered lower returns than their corresponding benchmarks over the same time periods.
In addition to this, sterling-denominated funds invested in emerging market, U.S., and international equities also underperformed their corresponding benchmarks. This is consistent with the finding for euro-denominated funds invested in these markets.
The survey also found that around half of UK active funds were closed or merged over a 10-year period. This can flatter the statistics for active versus passive managers. The most resilient sector was Emerging Markets where only 27% of funds disappeared over the period.
Fund research group Square Mile said that passive enquiries now accounted for approximately 20% of total traffic on its website since they were introduced. It found that UK tracker funds dominated the top ten most viewed passive vehicles, with the BlackRock 100 UK Equity Tracker taking top place followed by the Aviva Investors UK Index Tracking 2 and Fidelity Index UK funds. The HSBC FTSE All Share Index and Vanguard FTSE U.K. All Share Index also featured in the top ten.
