πŸ‘‰ Do you know that 50% of European equity funds created less than 10 years ago outperformed passive funds?

22 January 2021

In this research, we calculate the performances of active funds from the date they were either created or included in the Morningstar European equity large-cap category after December 31st, 2010 until the end of 2020. We compare them with the performance of ETFs on the same benchmark over the same period. We found that half of them outperformed. This is much more than the 10-year figures for European equity given by Morningstar or SPIVA (13% over 10 years until mid-2020, the latest available data).

Additionally, do you know that among the European equity active funds that were present 10 years ago but no longer exist in the category, 22% outperformed their passive counterparts? Keep in mind that the percentage of funds outperforming, calculated in the market to correct for survivorship bias, is based on the strong assumption that all funds no longer existing, underperformed. But in fact, the research shows that nearly a quarter outperformed.

πŸ€” The active-passive allocation decision is key to optimize portfolio performance. Shouldn’t it be based on exhaustive and reliable data ?

Marlene Hassine Konqui