“However, this view was not substantiated by our research, as over 90% of active funds underperformed their benchmarks over all time horizons.”
What the recent data makes clear is that there is a growing discrepancy between active and passive performance.
“Global equity markets, as measured by the S&P Global 1200, rose 11.51% over the one-year period in euro terms,” said Ung.
“This improved performance was due to a more benign global economic outlook and an easing of uncertainty that followed the Brexit referendum and the US presidential election.
“While the prevailing market conditions turned more positive, our report indicates that euro-denominated active funds invested in pan-European equities underperformed across all time horizons analyzed.”
There were a few exceptions to this rule, Ung admitted. Some active funds concentrated on equities in single countries, like Denmark, bounded over their benchmarks on a one-year view.
But, said funds still struggled to outperform over a ten-year period. Only 20% of Danish funds beat the S&P Denmark BMI within that time frame.
