Almost 90% of U.K. active equity strategies underperformed the benchmark over the year ended June 30, a fourfold increase on the proportion of strategies that underperformed the benchmark in the 2015 calendar year, said S&P Dow Jones Indices.
In its S&P Indices Versus Active Funds scorecard, the index provider found that 86% of U.K. active equity strategies, denominated in sterling, underperformed the S&P U.K. Broad Market index for the year ended June 30. That compares with a 22.2% underperformance for the year ended Dec. 31.
For the three years ended June 30, 59.9% of U.K. active equity strategies underperformed. For five years, it was 63.1%; and 10 years, it was 77.1%.
Performance of active euro-denominated European equity strategies improved over one year to June 30, vs. three-, five- and 10-year performance. Over one year, 57.4% of strategies underperformed the S&P Europe 350, compared with 72.6% over three years, 79.9% over five years and 87.5% over 10 years. For calendar year 2015, 31.9% of active European equity strategies underperformed the benchmark.
In the year ended June 30, active sterling and euro-denominated international strategies also struggled to outperform their benchmarks. Compared with the S&P Global 1200 index, 87.2% of sterling-denominated strategies failed to surpass the benchmark, and 87.9% of euro-denominated global strategies also underperformed. In commentary accompanying the report, S&P DJI said the underperformance occurred despite active management opportunities in volatile markets.
Active U.S. equities managed in sterling-denominated strategies underperformed the S&P 500 in 93.5% of cases, rising to 99.1% over 10 years. For euro-denominated U.S. equity strategies, that proportion increased to 93.5%.