SUMMARY
- S&P Dow Jones Indices has been the de facto scorekeeper of the ongoing active versus passive debate since the first publication of the SPIVA U.S. Scorecard in 2002. Over the past 19 years, we have built on our experience publishing the report by expanding scorecard coverage into Australia, Canada, Europe, India, Japan, Latin America, South Africa, and the MENA region.
- The SPIVA Australia Scorecard reports on the performance of Australian active funds against their respective benchmark indices over different time periods. In this scorecard, we evaluated the returns of 936 Australian equity funds (large, mid, and small cap, as well as A-REIT), 500 international equity funds, and 109 Australian bond funds.
- More than one-half of the funds in the Australian Equity General and Australian Equity Mid/Small-Cap categories beat their respective benchmarks in the first half of 2021, while 68.9% of those in the International Equity General category underperformed the benchmark.
- For longer measured periods (3, 5, 10, and 15 years), the majority of active funds underperformed their respective benchmark indices across categories, except for Australian Equity Mid- and Small-Cap funds.
- Australian Equity General Funds: The S&P/ASX 200 gained8% in the 1-year period ending June 30, 2021, while Australian Equity General funds recorded higher returns of 29.2% and 30.1% on equal- and asset-weighted bases, respectively. During this period, 55.7% of funds in this category outperformed the benchmark. But over the 5- and 10-year horizons, 75.7% and 80.8% of funds failed to beat the benchmark, respectively.
- Australian Equity Mid- and Small-Cap Funds: The S&P/ASX Mid-Small posted a strong gain of 34.5% in the 1-year period ending June 30, 2021, and 65% of Australian Equity Mid- and Small-Cap funds beat the index. Funds in this category gained 41.0% and 39.9% on equal- and asset-weighted bases, respectively, for the same period. Over the 5- and 10-year periods, 65.3% and 55.1% of funds underperformed the benchmark, respectively.
- International Equity General Funds: International equity funds returned 28.5% and 24.5% on equal- and asset-weighted bases, respectively, in the 1-year period ending June 30, 2021, with 54.6% of funds failing to beat the benchmark. Over the 5- and 10-year periods, more than 80% and 90% of funds underperformed the S&P Developed Ex-Australia LargeMidCap, respectively.
- Australian Bond Funds: The S&P/ASX Australian Fixed Interest 0+ Index recorded a loss of 0.87% in the 1-year period ending June 30, 2021, while funds in the Australian Bonds category recorded minor gains of 0.06% and 0.35% on equal- and asset-weighted bases, respectively. Over 70% of funds in this category beat the benchmark during this period. In contrast, 70.2% and 85.5% of funds underperformed the benchmark over the 5- and 10-year periods, respectively.
- Australian Equity A-REIT Funds: In the 1-year period ending June 30, 2021, Australian Equity A-REIT funds posted gains of 32.6% and 32.8% on equal- and asset-weighted bases, respectively, and 58.5% of them lagged the benchmark. Over the 5- and 10-year periods, 56.5% and 78.8% of funds in this category underperformed the benchmark, respectively.
- Fund Survivorship: Liquidation rates for some active fund categories were high in the 1-year period ending June 30, 2021. Of all Australian funds measured, 7.7% were merged or liquidated, with those in the Australian Equity General category recording the highest liquidation rate, at 10.7%. In contrast, only 2.9% of Australian Equity Mid- and Small-Cap funds failed to survive. Over longer horizons, only 84.0%, 76.5%, and 60.6% of funds across all categories survived the 3-, 5-, and 10-year periods, respectively.
