S&P Dow Jones Indices has been the de facto scorekeeper of the ongoing active versus passive debate since the first publication of the S&P Indices Versus Active (SPIVA) U.S. Scorecard in 2002.
The SPIVA South Africa Scorecard measures the performance of actively managed South African equity, global equity and fixed income funds denominated in South African rand (ZAR) against their respective benchmark indices over various time horizons.
Mid-Year 2023 Highlights
The first half of 2023 proved challenging for active equity managers in South Africa, although fixed income managers fared better. At either extreme, 89% of South Africa Global Equity managers underperformed the S&P Global 1200, while only 19% of Diversified/Aggregate Bond managers trailed the broad sovereign bond index (see Exhibit 1 and Report 1). Underperformance rates generally increased with measurement horizons, with a cross-category average of 70% of active funds underperforming over the past 10 years.
- South Africa Equity Funds: The S&P South Africa 50 finished H1 2023 up 5.1%, while South Africa Equity funds posted gains of 3.7% and 4.0% on equal- and asset-weighted bases, respectively, and 75% of funds underperformed the benchmark. Underperformance rates rose to 77%, 88% and 96% over the 3-, 5- and 10-year horizons, respectively. Compared with the S&P South Africa Domestic Shareholder Weighted (DSW) Capped Index, which rose 3.3% in H1 2023, 55% of South Africa Equity funds underperformed. Over the 3-, 5- and 10-year horizons, underperformance rates reached 54%, 50% and 69%, respectively.
- Global Equity Funds: The S&P Global 1200 gained 27.9% during H1 2023, and Global Equity funds gained 22.9% and 24.2% on equal- and asset-weighted bases, respectively. Over this period, 89% of funds in the category underperformed the benchmark. Over the 3-, 5- and 10-year periods, 89%, 100% and 100% of funds underperformed, respectively.
- Short-Term Bond Funds: As the STeFI Composite increased 3.7% in H1 2023, 26% of Short-Term Bond funds finished the period underperforming the index. Over the first half of 2023, bond funds in this category gained 3.9% and 4.1% on equal- and asset-weighted bases, respectively. Over the 3-, 5- and 10-year periods, 15%, 20% and 31% of funds underperformed, respectively. On a risk-adjusted basis, however, underperformance rates rose to 79%, 82% and 98% over the 3-, 5- and 10-year periods, respectively.
