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Active vs passive: which is underperforming?

Active_vs_Passive fundsStock pickers have been struggling to outdo their respective benchmarks, according to the latest data from S&P Global.

Despite “strong” market conditions, over 70% of European active equity funds underperformed the S&P Europe 350 index throughout 2019.

Their passive counterparts outperformed the benchmark by 1.5% on an asset-weighted basis, according to the S&P Indices Versus Active (SPIVA) Europe scorecard, which has been providing data on the active versus passive debate since 2002.

The longer the time horizon, the worse the figures for active funds. Over five years, 78% underperformed the benchmark, whilst over ten years nearly 87% could not keep up with the S&P Europe 350 index.

Andrew Innes, regional head of global research and design, said: “Outperformance would have at least provided a buffer for the turbulent times that we now know lingered around the corner.”

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