Morningstar reported that a third of European active equity managers outperformed the average passive fund in the one-year period to the end of June 2023. However, in the last decade, only 17.1% of active equity and 23.1% of bond managers outperformed their passive peers, highlighting the compelling value proposition of index-based funds. Global fund flows show more investors than ever are choosing indexation strategies, which Kingsley Williams, CIO of Satrix*, says makes sense, as the odds are stacked against investors in being able to correctly identify an outperforming active fund. Past performance has generally been a poor indicator of future returns.
Morningstar reported that a third of European active equity managers outperformed the average passive fund in the one-year period to the end of June 2023. However, in the last decade, only 17.1% of active equity and 23.1% of bond managers outperformed their passive peers, highlighting the compelling value proposition of index-based funds. Global fund flows show more investors than ever are choosing indexation strategies, which Kingsley Williams, CIO of Satrix*, says makes sense, as the odds are stacked against investors in being able to correctly identify an outperforming active fund. Past performance has generally been a poor indicator of future returns.
