The Mid-Year 2023 SPIVA report for Europe has just been published, and it makes pretty grim reading for fund managers in the UK and in mainland Europe.
First published in 2014, the semi-annual SPIVA Europe Scorecard reports on the performance of actively managed funds in 22 different categories.
In the first half of 2023, no fewer than six of those categories saw underperformance of more than 90%.
Of course, six months is far too short a time horizon to judge a fund manager’s level of skill. But over longer periods, the performance is even worse. Over ten years, at least 80% of funds underperformed the benchmark in 17 of the 22 categories.
Key figures
Here are some of the main bullet points:
In H1 2023, 72% of British pound sterling-denominated and 76% of euro-denominated actively managed Europe Equity funds underperformed the S&P Europe 350, while 77% of Eurozone Equity funds underperformed the S&P Eurozone BMI.
Euro-denominated Global Equity funds maintained a relatively high underperformance rate over longer time horizons. Over the ten-year period ending June 2023, 98% of funds underperformed the S&P Global 1200.
British pound sterling- and euro-denominated U.S. Equity funds performed similarly, with 71% and 74% underperforming in the first half of 2023 in GBP and EUR, respectively, and 95% and 97%, respectively, underperforming over a ten-year horizon.
94%, 96% and 99% of France, Italy and Spain Equity funds lagged their benchmarks, respectively, in the first six months of 2023.
Over one, three, five and ten years, not a single fund Denmark Equity has outperformed the index.
Poland delivered the best performance in H1 2023. Only 12% of Poland Equity funds lagged the S&P Poland BMI.
95% of actively managed UK Small-Cap Equity funds underperformed the S&P United Kingdom SmallCap in the first six months of 2023, the highest ever underperformance rate for this category.
For Government Bond (USD) funds, 86% underperformed the iBoxx Global Government United States in H1 2023, the highest underperformance rate among our fixed income categories. Meanwhile, Government Bond (GBP) funds performed relatively better, with 52% underperforming the iBoxx Sterling Gilts in the first half of 2023, although underperformance increased to 95% when measured over a ten-year period.
European corporate bond funds outperformed their high yield and government bond peers. Only 54% of Corporate Bond (EUR) funds underperformed the iBoxx Euro Corporates. Meanwhile, 79% of High Yield Bond (EUR) funds underperformed the iBoxx Euro Liquid High Yield, while 81% of Government Bond (EUR) funds underperformed the iBoxx Euro Sovereigns in H1 2023.
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