Tag Archives: active performance
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…
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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…
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Confusing Style and Selection
A headline from yesterday was very intriguing: “Why investors crave a return to the art of stock-picking.” Copious data demonstrate the peril of placing hope in active management. The article argues that since we seem to be in a trend that favors value, it is a good time for managers to pick stocks based on…
An Unexpected Outcome for Stock Pickers?
Active managers were welcomed by a disheartening headline this morning. “The 2018 Comeback That Wasn’t for Stock Pickers” highlights that “just 38% of actively managed U.S. stock funds tracked by Morningstar outperformed their counterparts at passively managed funds last year.” This should hardly have been considered shocking. Both long-term and more recent data (notably including…
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Prediction for 2018: There Will Be Many Predictions
A calendar that offers a forecast for every day of the coming year is not uncommon in Chinese households. I don’t often hear references to the calendar on most days. But every now and again I would hear my mom marvel, “Oh that calendar was right on for today!” In investing, there is also particular…
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2017…Among the Sleepiest of Years
If 2016 was unremarkable, 2017 was downright sleepy…at least as far as equity markets were concerned. In 2017, the S&P 500 notched the lowest level of volatility in 27 years. Both dispersion and correlations were among the lowest levels in the same period. This is in spite of a year that was far from lacking…
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Pockets of Active Achievement
The last 16 years have not been kind to active management. But that shouldn’t come as a surprise. Unless the laws of basic arithmetic change, the theoretical argument on the perils of active management is ironclad. SPIVA data offer solid evidence to back up theory. As the chart below shows, most active managers underperform most…
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Playing the Loser’s Game
Forty years ago, Charles Ellis characterized active investment management as a “loser’s game.” From the perspective of the mid-1970s, Ellis argued that since institutional investors had come to dominate the U.S. equity market, they could no longer generate market-beating returns by taking advantage of less well-informed amateurs. Investment management had become a game played by professionals against other…