Since the first publication of the S&P Indices Versus Active Funds (SPIVA) U.S. Scorecard in 2002, S&P Dow Jones Indices has been the de facto scorekeeper of the ongoing active versus passive debate.
The SPIVA Canada Scorecard measures the performance of Canadian actively managed funds against their respective benchmarks over various time horizons, covering large-, mid- and small-cap segments, as well as international and global equity funds.
Year-End 2023 Highlights
2023 was a relatively challenging year for most actively managed funds in Canada. More than three-quarters of active funds underperformed their benchmarks in most categories, including Canadian Equity funds at 85%, Canadian Focused Equity funds at 77% and Dividend & Income Equity funds at 94% (see Exhibit 1 and Report 1). Small-/Mid-Cap Equity funds posted the lowest mid-year underperformance, with 71% lagging the benchmark. Underperformance rates generally increased with time horizons.
- Canadian Equity Funds: The S&P/TSX Composite Index gained 11.8% in 2023, while Canadian Equity funds gained 9.3% and 10.1% on equal- and asset-weighted bases, respectively. Underperformance rates hit 85% over the one-year period, climbing to 74%, 93% and 97% over the 3-, 5- and 10-year horizons, respectively.
- Canadian Focused Equity Funds: The blended benchmark of 50% S&P/TSX Composite Index + 25% S&P 500® + 25% S&P EPAC LargeMidCap gained 15.6% in 2023, outperforming 77% of Canadian Focused Equity funds. Underperformance rates were 63%, 86% and 98% over the 3-, 5- and 10-year horizons, respectively.
- Canadian Dividend & Income Equity Funds: The S&P/TSX Canadian Dividend Aristocrats® Index gained 10.0% during 2023, while Canadian Dividend & Income Equity funds gained 7.2% and 7.7% on equal- and asset-weighted bases, respectively. Underperformance rates surpassed 94% over the one-year period, reaching 76%, 94% and 88% over the 3-, 5- and 10-year horizons, respectively.
- Canadian Small-/Mid-Cap Equity Funds: The S&P/TSX Completion Index rose 10.4% in 2023, and 71% of Canadian Small-/Mid-Cap Equity funds underperformed the index. Funds in this category gained 6.7% and 8.5% on equal- and asset-weighted bases, respectively, over the one-year period.
- U.S. Equity Funds: The S&P 500 gained 22.9% in 2023, and 76% of U.S. Equity funds underperformed the index. Few funds in the U.S. Equity category outperformed over the long term, with 96%, 92% and 98% underperforming over 3-, 5- and 10-year horizons, respectively.
- International Equity Funds: 86% of International Equity funds trailed the S&P EPAC LargeMidCap in 2023, and 83%, 83% and 96% underperformed over the 3-, 5- and 10-year periods, respectively.
- Global Equity Funds: The S&P Developed LargeMidCap rose 21.2% in 2023, and Global Equity funds gained 14.7% and 12.9% on equal- and asset-weighted bases, respectively. Over the one-year period, 90% of funds in the category trailed the benchmark. Over the 3-, 5- and 10-year periods, 94%, 94% and 98% of funds underperformed, respectively
- Fund Survivorship: Liquidation rates for all categories were in single digits for the oneyear period ending Dec. 30, 2023. Over the 10-year period, 43% of Canadian Equity funds merged or liquidated, and an average of 39% of funds disappeared across all categories (see Report 2).
