SPIVA® Latin America Mid-Year 2018 Results

Last week, the SPIVA Latin America Mid-Year 2018 Scorecard was released. The scorecard tracks the performance of active mutual funds in Brazil, Chile, and Mexico through the end of June 2018. Exhibit 1 shows how managers fared against their respective category benchmarks for one-, three-, and five-year lookback periods.

In the short- and long-term periods, most managers were unsuccessful in outperforming their benchmarks. The lone exception was observed in the Brazil Large-Cap category, where a slight majority outperformed over the one-year time horizon. However, longer measurement periods showed similar results to the other categories, with over 87% of managers underperforming over the five-year period.

Exhibit 2 shows the five-year average annualized fund returns on an asset-weighted and equal-weighted basis within each category. Comparing the two return types can give insight into how managers of different sizes (in terms of assets under management) performed.

For all Brazil categories and Mexico, asset-weighted returns were higher than equal-weighted returns; these results suggest larger managers likely performed better than smaller managers. Chile Equity was the sole category in which the equal-weighted return was higher than the asset-weighted return, meaning smaller managers likely did better than larger managers. Fund category returns calculated either way underperformed their respective benchmarks for all categories besides Brazil Large-Cap. For this category, the asset-weighted return was 9.1% annualized, outperforming the benchmark by 0.9%.

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