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Active manager performance slumps: SPIVA

The coronavirus has wiped out the performance gains of active fund managers against their respective benchmarks, according to the latest SPIVA scorecard.

S&P Dow Jones Indices' SPIVA scorecard, touted as the "de facto scorekeeper of the ongoing active versus passive debate", exposed performance issues over the long and short term as a result of the COVID-19 pandemic.

Between January and March 2020, SPIVA reported many active managers improved their performance relative to the benchmark.

This was wiped out by the coronavirus, which forced massive drawdowns in Aussie equity funds of 11.66% (equal weighted) and 11.39% (asset-weighted). As the S&P/ASX 200 lost 10.42%, about two thirds of the funds analysed underperformed the benchmark in the first half of 2020.

Among Aussie small- and mid-cap funds, more than half (55.6%) did not beat the benchmark.

International equity funds fared better; while the benchmark lost 3.2%, these funds recorded an average return of -3.88%. About 60% underperformed the benchmark, while almost all the funds (90%) failed to beat it over a 15-year period.

Australian bond funds were a safe haven for many investors, reporting small gains of 2.94% and 2.87% on equal- and asset-weighted bases. The majority (73%) of bond fund managers however, did not beat the S&P/ASX Australian Fixed Interest 0+ Index.

A-REITs lost about 22% in the six months to June, while the S&P/ASX 200 A-REIT suffered a loss of 21.29%. Nearly 45% of funds in this category underperformed the benchmark, though a much higher portion of funds failed to beat the benchmark over longer periods.

The SPIVA scorecard evaluated returns of over 910 Australian equity funds (large, mid and small caps, and A-REITs), 463 international equity funds and 116 Australian bond funds.

Read more: SPIVAASXS&P Dow Jones IndicesFunds managment
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