The saying goes, “What does not kill you makes you stronger,” but could that strength translate into a greater chance of survival? Perhaps, especially if all future risks were equal or sufficiently similar to the one that was survived—assuming, of course, that one learned from that first experience.
The survival of mutual funds could follow the same premise. Unfortunately, every day is different; economic, political, and public health circumstances constantly change, making each market observation an independent event.
The S&P Indices Versus Active (SPIVA®) Latin America Scorecard compares the performance of actively managed mutual funds in Brazil, Chile, and Mexico to their benchmarks over 1-, 3-, 5-, and 10-year periods.
In the mid-year 2021 scorecard, we observed fund survivorship from December 2014 to June 2021 (14 semiannual reports) under all categories and horizons covered by the report. In the case of the 10-year period, data is only available from December 2018 to June 2021 (six semiannual reports).
In Exhibit 1, we can see that the highest survival rates in all categories were in the one-year period, while the lowest survival rates were in the 10-year period—the longer the observation window, the lower the probability of survival.
It can also be observed that both the 1- and 10-year periods presented lower dispersion compared with the 3- and 5-year periods. The category with the highest dispersion in all observation periods was Brazil Corporate Bond Funds and the category with the lowest dispersion in all observation periods was Mexico Equity Funds.
To see the latest active versus passive results including the fund survivorship report, please see the SPIVA Latin America Mid-Year 2021 Scorecard.
 The categories covered in the SPIVA Latin America Scorecard are: Brazil Equity Funds, Brazil Large-Cap Funds, Brazil Mid-/Small-Cap Funds, Brazil Corporate Bond Funds, Brazil Government Bond Funds, Chile Equity Funds, and Mexico Equity Funds.The posts on this blog are opinions, not advice. Please read our Disclaimers.