Businessman analyzing report

The vast majority of actively managed Canadian equity funds continue to lag the S&P/TSX composite benchmark index for the 12 months ended June 30, according to SPIVA Canada Scorecard from S&P Dow Jones Indices (S&P) published Monday.

Over the 12-month period, 93% of actively managed Canadian equity funds failed to beat the S&P/TSX composite index, the report says, while 91% of Canadian small-/mid-cap equity managers trailed the S&P/TSX completion index over the same time period.

“Over a one-year horizon, the majority of active managers once again failed to beat their respective benchmarks; six of the seven fund categories underperformed. Canadian dividend & income equity funds yielded better results than the benchmark and offered the exception,” S&P says in the report.

“As the Bank of Canada increased interest rates, yield-focused active equity strategies continued to offer the best relative performance of any category over a one-year horizon; 67.57% of Canadian dividend and income equity funds beat the S&P/TSX Canadian dividend aristocrats index since the end of June 2017. But 100% of the category’s funds lagged the benchmark over a 10-year horizon,” it adds.

Global and U.S. equity managers performed a bit better, although 85% of actively managed global equity funds underperformed the S&P developed largemidcap index over a one-year period, S&P says. At the same time, 72% of actively managed U.S. equity funds underperformed the S&P 500.

Longer-term results continue to show that “active equity funds found it difficult to beat their respective benchmarks,” S&P says. “The data for the 10-year period shows that around nine out of every 10 funds underperformed their respective benchmark, and a similar story is evident over a five-year horizon.”