Equity markets in Latin America saw gains across the board in 2016, with Brazil being one of the leaders, as the S&P Brazil BMI (BRL) returned 37.90%. The Chilean market saw the largest yearly return since 2010, with a return of 13.53% for the S&P Chile BMI (CLP), while the S&P Mexico BMI (MXN) returned 6.99%.
As shown in Exhibit 1, the majority of active fund managers in Latin American markets were unable to outperform their respective benchmarks for all categories measured—one-, three-, and five-year periods.
Exhibit 2 shows the rolling five-year underperformance numbers reported in the SPIVA Latin America Scorecard since it was introduced in 2015. For all categories, the majority of managers underperformed their benchmark for a five-year time horizon, regardless of the report end date. “Consistent underperformance” is a suitable characterization.
For more details of the SPIVA Latin America Year-End 2016 Scorecard, please click here.