- Active Managers Fail In 2008: New Data from SPIVA

Active Managers Fail In 2008: New Data from SPIVA

Written by Wilfred Ling

Tuesday, 21 April 2009

Read the report by Standard & Poor’s Index Verses Active Fund Scorecard SPIVA. You can also listen to the podcast. The following is a summary:

"The belief that bear markets strongly favor active management is a myth”

63% of global funds underperformed the index;
84% of international funds underperformed the index;
59% of the international funds underperformed the index;
90% of the emerging market funds underperformed the index;
>90% of the fixed income funds underperformed the index;
52% of the high yield fixed income underperformed the index;
79% of global fixed income underperformed the index;
62% of emerging market bonds underperformed the index

The only sector which active managed funds did well was that 78% of large-cap value active managed funds outperformed the index.

“The emerging markets case is especially galling, as active managers like to claim that they add extra value in illiquid markets. On a five-year basis, however, the average emerging market fund trailed its benchmark by more than 3% per year”

The above conclusions by S&P is consistent with my earlier findings which I published HERE.

I've cease recommending unit trusts to my clients already. Unless the source of money comes from CPF and SRS for investments, I've been telling my clients to use ETFs.

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