A Year of Two Halves for Australian Large-Cap Equity Managers
The first half of 2022 brought steep and broad-based losses for Australian equity indices of all stripes. On a relative basis, however, active Australian Equity General funds had a decent start to 2022; as our SPIVA® Australia Mid-Year 2022 Scorecard reported, a (slim) majority of active managers in this category outperformed the S&P/ASX 200. Unfortunately…
SPIVA Canada Scorecard 2022: Country, Currency and Concentration Contexts
Since 2004, our SPIVA® Canada Scorecards have shown that a majority of actively managed Canadian equity funds typically underperform the S&P/TSX Composite Index. However, according to the recently published SPIVA Canada Year-End 2022 Scorecard, the annual underperformance rate dropped to the best result we have seen since 2015: just 52% of Canadian Equity managers lagged…
SPIVA U.S. Scorecard 2022: Fewer Excuses
For over a decade, our SPIVA® Scorecards have shown a majority of actively managed U.S. large-cap equity funds underperforming the S&P 500®. According to the freshly published SPIVA U.S. Year-End 2022 Scorecard, the annual underperformance rate dropped to the slimmest of margins last year: just 51% of large-cap U.S. managers lagged the S&P 500 in…
Peak Passive and Market Efficiency
With more than $7 trillion tracking the S&P 500 alone, we estimate that index funds now encompass between a quarter and a third of the capitalization of the U.S. equity market. This extraordinary growth must surely rank as one of the most important developments in contemporary financial history. When will it end? For at least…
Active Performance Shortfalls and the Rise of Passive
Why did indexing take root and how has it grown so far so fast? S&P DJI’s Craig Lazzara and Anu Ganti take a closer look at why indexing works, the size of the passive market today, and the historical savings linked to indexing.
Active Ability versus Active Outperformance
Some commentators have argued that today’s market environment—characterized by rising rates and economic growth concerns—is a ripe environment for stock pickers. This argument is conditionally correct, as long as we remember that having the opportunity to add value does not guarantee that value gets added. In today’s environment, active managers have good potential to add…
Why Indexing Can Be Applied to Thematics
Index funds, which hardly existed 50 years ago, now play a prominent role in global financial markets. But passive investing does not dominate in every market segment. Recently, we have seen exponential growth in so-called “thematic” investing, with a proliferation of themes in areas like cybersecurity, robotics and electric vehicles. This more granular space is…
What Performance Reversals Suggest
Investment results in 2022 were distinctly different from those of the recent past. The S&P 500®, which had doubled in the three years between 2019 and 2021, fell by more than 18% last year, and Exhibit 1 shows that there were regime shifts among factor indices as well. The dominance of Value over Growth in…
Building a Passive Bridge across the Pond
At over 300 years old, the British government bond and stock markets are among the world’s oldest. They are also among the largest globally; ranked by float-adjusted market capitalization, the U.K. gilt market and U.K. stock market are the fourth and third biggest, respectively. The British investment industry has existed for centuries, with the country’s…
The Key to the S&P 500 ESG Index’s Outperformance: Avoiding the “Worst”
Now approaching its fourth anniversary since launch, the S&P 500® ESG Index seeks to reflect many of the attributes of the S&P 500 itself, while providing an improved sustainability profile as a result of an updated ESG score.1 With live performance data covering an extraordinary period—including two bear markets on either side of a growth…
