Standard & Poor’s Index Versus Active Funds Scorecard: Australia Year-End 2009

Abstract

Over a five-year period ending December 2009, respective benchmark indices have outperformed the majority of active funds across the different peer groups covered by the SPIVA Scorecard. In contrast for the 2009 calendar year comparative analysis of the annual returns shows that a majority of active funds have outperformed their benchmark across most peer groups.The S&P/ASX 200 Accumulation Index has outperformed 63% of active Australian equity funds over a five-year time horizon. Data over one year and three years shows an equal split between active funds underperforming and outperforming the index.A majority of active Australian equity small-cap funds have outperformed the S&P/ASX Small Ordinaries Index across all time horizons. Most notably, 73% of active small-cap funds outperformed the benchmark index over a three-year period.The MSCI World ex Australia Index has outperformed 69% of actively managed international equity funds in the last five years. However, the index has outperformed only 24% of actively managed international equity funds over the last year.The asset-weighted average returns of the International Equity peer group are significantly higher than the simple equal-weighted average of the peer group, which means that within this peer group the larger funds are performing better. This is attributed to the evidence of a general allocation of investors’ funds to the better performing active funds in this peer group.Consistent with International Equities the asset-weighted returns of the Australian Bonds and Australian Equity A-REIT peer group are significantly higher than the simple equal-weighted returns of their respective peer groups, indicating that larger funds perform better in each of these peers groups.