32
lacible | Mai 2021
FEATURE ARTICLE
So we can see that over the last year, some actively
managed mutual funds did well or even outper-
formed their benchmark index, but over a period
of ten years, the benchmark index has always taken
the lead.
Another important fact: these are averages, with all
the advantages and disadvantages that involves.
For an investor in a fund category that beats the
index, their return would be higher than the bench
-
mark even over the long term.
Although there are many families of EFTs, as there
are for mutual funds, the performance of the vari-
ous families is almost identical for passive manage-
ment. This is not the case for mutual funds, where
the portfolio manager has more power over the
selection and choice of securities.
The SPIVA scorecard also shows the percentage of
funds that over- or underperformed their bench
-
mark index, as can be seen in Table 2 (see page 33).
Just over 10% of Canadian equity funds exceeded
the index in 2020. This weighting is relatively stable,
even over a period of ten years, since it is around
15%.
We can see that nearly 80% of funds in the Cana
-
dian small and medium cap equity category ex-
ceeded the index in 2020 and that this percentage
declines to 35% for a ten-year period.
As for Canadian dividend and income equity funds,
over 55% outperformed the index in 2020, but for
the ten-year period, this performance dwindles to
just 10%.
As the late great Professor Jacques Lussier, CFA,
said, the luck factor is often part of the recipe
when a portfolio manager posts a noteworthy
performance
.1
.
In conclusion, we can see that in most cases, pas-
sive management seems to be more profitable than
1 See online: .
Report 3: Equal-Weighted Fund Returns
CATEGORY 1 YEAR (%) 3 YEARS (ANNUALIZED, %) 5 YEARS (ANNUALIZED, %) 10 YEARS (ANNUALIZED, %)
S&P/TSX Composite 5.60 5.74 9.33 5.76
Canadian Equity 0.81 2.49 6.06 4.49
S&P/TSX Completion 5.97 5.21 8.48 4.47
Canadian Small-/Mid-Cap
Equity
14.27 3.89 6.16 3.89
S&P/TSX Canadian Dividend
Aristocrats Index
-2.34 4.17 7.84 7.14
Canadian Dividend & Income
Equity
-1.17 2.63 5.93 5.29
S&P 500 (CAD) 16.32 14.81 13.24 16.75
U.S. Equity 13.61 11.07 9.95 12.69
S&P EPAC LargeMidCap (CAD) 8.96 5.98 6.71 8.88
International Equity 7.03 4.46 5.27 7.01
S&P Developed LargeMidCap
(CAD)
14.93 11.66 10.90 13.14
Global Equity 10.77 7.57 7.30 8.76
50% S&P/TSX Composite +
25% S&P 500 (CAD) + 25% S&P
EPAC LargeMidCap (CAD)
9.30 8.15 9.78 9.36
Canadian Focused Equity 6.52 4.17 6.13 5.01
Source: https://www.spglobal.com/spdji/en/documents/spiva/spiva-canada-scorecard-year-end-2020.pdf.
Table 1
