Fixed-income managers fare better in beating benchmarks – report

The majority of institutional fixed-income managers outperformed their benchmarks in 2018, while institutional equity managers fared less well, according to a report released Wednesday by S&P Dow Jones Indices.

S&P's SPIVA Institutional Scorecard for year-end 2018 shows that among its 18 fixed-income categories, 11 featured outperformance by more than 50% of active managers in 2018 against their benchmarks.

Active municipal bond managers fared best, with 90.1% of institutional funds outperforming the S&P National AMT-Free Municipal Bond index.

Active government bond managers had the next-best percentage of outperformance, with 78.3% of institutional funds outperforming the Bloomberg Barclays U.S. Government index.

Active emerging markets debt featured the smallest number of institutional funds outperforming its benchmarks, with only 2.7% of emerging market local currency debt funds outperforming the Bloomberg Barclays Emerging Markets Local Currency Government index.

Among the 21 institutional equity fund categories listed by S&P 500, only three featured a majority of funds outperforming their benchmarks. Active domestic midcap growth funds had by far the best showing in 2018, with 81.6% outperforming the S&P MidCap 400 Growth index.

The next best performing category was broad active midcap equities with 55.9% of active funds outperforming the S&P MidCap 400.

International equities, domestic small-cap core equities and domestic midcap value equities fared the poorest, with only 32.1%, 32.5% and 33.6%, respectively, outperforming their respective benchmarks.

All returns in the report were gross of fees. When taking fees into account, both institutional fund and mutual fund performance is relatively worse, the report says.

The 2018 SPIVA Institutional Scorecard is available on S&P Dow Jones Indices' website.

Source: Bloomberg