Eighty per cent of sterling denominated UK actively managed funds outperformed the S&P United Kingdom BMI between June 2016 and June 2017, according to the bi-annual S&P Indices Versus Active Funds (SPIVA) Europe Scorecard – Mid-Year 2017 Results.
However, over a 10-year period this number drops down to 28 per cent. Active funds investing in UK equity achieved an average asset-weighted return of 24.2 per cent over the most recent year, compared to just 17.6 per cent for the corresponding benchmark, S&P United Kingdom BMI.
The star-performers in the UK were those active funds investing in small-cap stocks, generating average, asset-weighted returns of 38.3 per cent compared to 22 per cent returned by the S&P UK SmallCap Index.
There has been a notable decrease in the number of active European equity funds underperforming the benchmark in the last year. Compared with the previous SPIVA® Europe Scorecard Year-End 2016, 50.9 per cent of euro-denominated, European equity funds underperformed the benchmark. While this still represents a small majority, it is fewer than the equivalent 80.4 per cent that were reported to underperform in the Year-End 2016 Scorecard.
However, when the asset-weighted performance is considered, active funds investing in pan-European equities collectively failed to beat the benchmark. The S&P Europe 350 returned an impressive 18.6 per cent over the one-year period. Euro-denominated active funds investing in this group underperformed with an average, asset-weighted performance of 17.6 per cent. Over the past ten years, the majority of active fund categories in Europe have underperformed.
