Summary
Can investment results be attributed to skill or luck? Genuine skill is more likely to persist, while luck is random and fleeting. Thus, one measure of skill is the consistency of a fund’s performance relative to its peers. The Persistence Scorecard measures that consistency and shows that, regardless of asset class or style focus, active management outperformance tends to be relatively short lived, with few funds consistently outranking their peers.
Among a total of 405 funds in our seven regional and six international reported fund categories across Brazil, Chile and Mexico whose performance placed them in the top quartile for the 12-month period ending December 2021, only five funds (1.2%) managed to remain in the top quartile each of the next four years (see Report 2). Exhibit 1 illustrates that in three out of seven categories, less than 50% of funds were able to repeat their top-half status over two consecutive five-year periods (see Report 6).
Report Highlights
Brazil
- Among Brazil’s top-performing equity funds, most did not maintain their outperformance in subsequent years. Of the 81 Brazil Equity funds ranked in the top quartile for the 12-month period ending December 2021, only 1 remained consistently in the top quartile over the four subsequent one-year periods (see Report 2).
- The Brazil Government Bond funds category experienced a similar decline in outperformance, with only 1 of 135 top-quartile managers as of December 2021 able to remain in the top quartile for the following four 12-month periods (see Report 2).
- Results for Brazil Corporate Bond funds were slightly better, with 6.1% of managers maintaining consistent top-quartile performance for five years in a row and 33.3% remaining in the top quartile for two consecutive three-year periods (see Reports 2 and 3).
- Among Brazil-domiciled Global Equity funds ranking in the top quartile over the five years ending in 2020, 20.0% remained in the top quartile over the following five years. In contrast, among Brazil-domiciled U.S. Equity funds ranked in the top quartile for the five years ending in 2020, none remained in the top quartile, and 40.0% either fell to the fourth quartile or were merged/liquidated (see Report 5).
Chile
- Most Chile Equity funds showed a lack of persistence, with not a single top-quartile fund from 2021 maintaining its ranking in the subsequent four years ending in 2025 (see Report 2).
- Among Chile Equity funds ranked in the top quartile over the three years ending in 2022, only 20.0% stayed in the top quartile over the next three years (see Report 3). After the five years ending in 2020, only 14.3% of top-quartile Chile Equity funds maintained their top-quartile ranking for the next five years, while 57.1% either fell to the bottom quartile or were merged/liquidated (see Report 5).
- Over a longer horizon, 80.0% of Chile-domiciled Global Equity funds ranked in the top half for the three years ending December 2022 lost their top-half status or were merged/liquidated in the following three years. The same was true for 66.7% of U.S. Equity funds (see Report 4).
Mexico
- Mirroring the results of other regions, top-quartile managers in Mexico had difficulty replicating their rank in subsequent years. After one year, 18.2% of 2021’s top-quartile Mexico Equity funds remained in the same quartile, yet this proportion fell to zero after four years (see Report 2).
- Among Mexico Equity funds in the top quartile over the three years ending in 2022, 40% subsequently dropped to quartile three or four over the following three-year period, while another 50% remained in the top quartile. None of these funds were merged or liquidated (see Report 3).
- Consistent with data from the SPIVA® Latin America Year-End 2025 Scorecard, Mexico had a higher fund survival rate than Brazil and Chile across all periods measured (see Reports 3, 4, 5 and 6). Only six (16.7%) Mexico Equity Funds were merged or liquidated over the five years ending in December 2025 (see Report 6).
- Mexico Equity funds that finished the five years ending in 2020 in the top quartile fared better than most over the subsequent five years ending in 2025, with 44.4% remaining in the top quartile (see Report 5).
