SPIVA® Latin America Year-End 2016 Results

S&P Dow Jones Indices
Written By: Phillip Brzenk
S&P Dow Jones Indices
Written By: Phillip Brzenk

Equity markets in Latin America saw gains across the board in 2016, with Brazil being one of the leaders, as the S&P Brazil BMI (BRL) returned 37.90%. The Chilean market saw the largest yearly return since 2010, with a return of 13.53% for the S&P Chile BMI (CLP), while the S&P Mexico BMI (MXN) returned 6.99%.

As shown in Exhibit 1, the majority of active fund managers in Latin American markets were unable to outperform their respective benchmarks for all categories measured—one-, three-, and five-year periods.

Exhibit 1: Percentage of Funds Outperformed by the Benchmark

Fund Category Comparison Index One-Year (%) Three-Year (%) Five-Year (%)
Brazil Equity Funds S&P Brazil BMI 81.95 70.02 72.29
Brazil Large-Cap Funds SS&P Brazil LargeCap 97.80 72.45 85.88
Brazil Mid-/Small-Cap Funds S&P Brazil MidSmallCap 69.88 89.89 84.06
Brazil Corporate Bond Funds Anbima Debentures Index (IDA) 91.87 95.29 98.39
Brazil Government Bond Funds Anbima Market Index (IMA) 76.57 82.25 81.94
Chile Equity Funds S&P Chile BMI 85.71 86.05 88.89
Mexico Equity Funds S&P Mexico BMI 75.51 85.11 69.77

Source: S&P Dow Jones Indices LLC, Morningstar. Data for periods ending Dec. 31, 2016. Outperformance is based on equal-weighted fund counts. Index performance based on total return in local country currency. Table is provided for illustrative purposes. Past performance is no guarantee of future results.

Exhibit 2 shows the rolling five-year underperformance numbers reported in the SPIVA Latin America Scorecard since it was introduced in 2015. For all categories, the majority of managers underperformed their benchmark for a five-year time horizon, regardless of the report end date. “Consistent underperformance” is a suitable characterization.


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