Since the first publication of the S&P Indices Versus Active Funds (SPIVA) U.S. Scorecard in 2002, S&P Dow Jones Indices has been the de facto scorekeeper of the ongoing active versus passive debate.
The SPIVA MENA Scorecard measures the performance of actively managed MENA equity funds against their respective benchmarks over various time horizons, providing statistics on outperformance rates, survivorship rates and fund performance dispersion.
Year-End 2022 Highlights
MENA equities plunged in 2022, with the S&P Pan Arab Composite down 5.67%. A majority of funds across all categories outperformed their respective benchmarks over the one-year horizon. MENA Equity funds performed particularly well, with just 18% of funds underperforming the S&P Pan Arab Composite (see Exhibit 1).
MENA
- 18% of MENA Equity funds underperformed the S&P Pan Arab Composite in 2022, while 23% underperformed the broader S&P Pan Arab Composite LargeMidCap Index. Funds in this category lost 2.49% and 1.82% on equal- and asset-weighted bases, respectively, over the same period (see Reports 1a, 3a and 3b).
- As time horizons extended, fund managers lost the ability to outperform in this category, with 91% of MENA Equity funds underperforming both benchmarks over the 10-year period ending in 2022 (see Report 1a).
- A high rate of attrition plagued the MENA Equity funds category, with only 39% of the funds analyzed surviving the 10-year period (see Report 2).
GCC
- While the S&P GCC Composite declined 4.78% in 2022, 33% of equity funds focused on the Gulf Cooperation Council (GCC) region underperformed over the past one-year period.
Saudi Arabia
- Although fewer than half of Saudi Arabia Equity funds underperformed their benchmark in 2022, the category underperformance rate of 46% was the highest among all MENA categories over the one-year period (see Report 1a).
- Over longer time horizons, the majority of Saudi Arabia Equity funds trailed the benchmark, with underperformance rates of 65%, 75% and 81% over 3-, 5- and 10-year periods, respectively.
- The survival rates of active Saudi Arabia Equity funds were the highest among all MENA categories, with 88% of funds surviving over the 10-year period.
