For more than a decade now, Standard & Poor’s has been contributing to the debate over active versus passive investing by producing its S&P Indices Versus Active Funds, or SPIVA, scorecards. These twice-yearly scorecards evaluate the evidence concerning the performance of actively managed funds relative to their benchmarks.
They show, year after year, that fewer active managers of U.S. domestic equity funds demonstrate persistent outperformance than would be randomly expected. The only conclusion to draw from this data is that past performance is not a reliable predictor of future performance.
Standard & Poor’s has expanded the scope of its reports, as well as the scope of the active-versus-passive management debate, with the launch of its European scorecard. The just-released inaugural report examines year-end results for 2013, in addition to the prior three- and five-year periods. Here are some of the report’s key findings about European equity funds:
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