The Australian share market gained almost 12% in 2016, but the 700 funds trying to beat it returned only 9.2% on average. In fact, a quarter of them returned less than 6% after fees. That’s the finding of a new survey by S&P Dow Jones Indices which found most Australian “active” funds still fail to beat their benchmarks.
The SPIVA Scorecard, published by S&P Dow Jones Indices since 2002, found more than 80 per cent of international equity and Australian bond funds, and more than 70 per cent of Australian general equity and A-REIT funds, underperformed their respective benchmarks over the past decade.
Looking at 2016 in isolation, Australian large-cap equity funds posted an average return of 9.2 per cent and the S&P/ASX200 gained 11.8 per cent, with 76 per cent of funds underperforming the index.
Over five and 10-year periods, 70 per cent and 74 per cent of Australian large-cap equity funds failed to beat the S&P/ASX200, respectively.
But when it comes to Australian-domiciled international equity funds, Australian bond funds and Australian A-REIT funds, all have underperformed their benchmarks over the past decade.
Download a copy of the SPIVA report here.