Some 60% of UK active fund managers failed to beat the FTSE All-Share Index in 2002 according to a n...
Some 60% of UK active fund managers failed to beat the FTSE All-Share Index in 2002 according to a new report by Virgin Money.
The findings, which form part of the annual WM Company study into active and passive management, reveal that there has now just been one occasion in the past 15 years when the average fund manager has done better than the market.
The report claims that over 20 years only 10 out of 48 actively managed unit trusts were able to beat the index, meaning some 80% of managers underperformed. According to the report the majority of funds in the UK All Companies sector that take a large stock size bias, a pragmatic or a style-neutral approach, do not deviate substantially in performance terms from the FTSE All-Share.
It went on to argue that those funds that are biased towards small stocks, whether growth or value orientated, exhibit both strongly cyclical and significant performance deviations from the index.
The report concluded: 'A sensible approach to investing in UK equities over the long-term may contain elements of both passive and active investing. The passive element will provide broadly market returns and risks, while the active element should be targeted where added value is perceived to be available.'
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