Active money managers find it tough to outperform benchmarks when it comes to sterling-denominated equity strategies investing in the U.S., emerging markets and international equities.
The latest S&P Indices Versus Active Funds Europe scorecard, published Wednesday by S&P Dow Jones Indices, found that 84.3% of U.S. equity strategies denominated in sterling underperformed their S&P 500 benchmark over the year ended Dec. 31.
The same was true for three-year performance, with 85.4% underperforming the benchmark, and five-year performance, at 94.4%. Euro-denominated U.S. equity strategies were even more likely to underperform, at 93.7% over one year, 95.1% over three years and 98.5% underperforming over five years.
Across global equity strategies denominated in sterling, 90.4% underperformed the S&P Global 1200 index over five years. Over three years, that figure was 83.4%, and one year, 85.3%.
However, sterling-denominated U.K. equity strategies fared better vs. the S&P United Kingdom Broad Market index. Over one year, strategies underperformed the benchmark in 54.9% of cases. However, in 2013, only about 11% of funds in this category underperformed the benchmark.