The S&P Indices Versus Active (SPIVA) Latin America Scorecard compares the performance of actively managed mutual funds in Brazil, Chile, and Mexico to their benchmarks over 1-, 3-, 5- and 10-year periods.
Mid-Year 2023 Highlights
In the first half of 2023, Latin American active managers produced mixed performance. The majority of active managers in most categories failed to outperform, especially over longer periods. Only in Brazil Corporate Bond and Chile Equity funds were underperformance rates below 50% over the first half of 2023.
- The S&P Brazil BMI increased 10.6% YTD. Funds in the Brazil Equity category climbed 9.8% and 10.9% on equal and asset-weighted bases, respectively. Of funds in this category, 58.1% underperformed the benchmark over the first half of the year, with underperformance rates rising to 76.6%, 74.5% and 92.3% over the 3-, 5- and 10-year horizons, respectively.
- Large-cap companies posted 10.0% in the first half of 2023, as measured by the S&P Brazil LargeCap. Funds in this category gained 7.1% on both equal and asset-weighted bases over the same period. In Brazil Large-Cap funds, 77.9% underperformed the index. Longer-term underperformance increased, with 82.4% of funds trailing over a 10-year period.
- In contrast, small- and mid-cap companies performed relatively better, with the S&P Brazil MidSmallCap up 11.9% YTD. Funds within this category gained 14.3% and 11.6% on equal and asset-weighted bases, respectively. Outperformance in this category was close to even, with 53.7% of active managers underperforming in H1 2023 and underperformance rates increasing over longer periods.
- Less than one-third of Brazil Corporate Bond funds underperformed, while 79.4% of Brazil Government Bond funds underperformed their benchmark over a six-month period. Consistent with their equity peers, rates of underperformance increased over longer periods.
- The S&P Chile BMI was up 7.2% YTD. However, only 35.6% of Chile Equity funds underperformed the index over the same period, with higher levels of underperformance over longer intervals.
- Larger funds performed relatively better than smaller funds over the 1-, 3-, 5- and 10-year periods on an asset-weighted basis versus an equal-weighted basis, while smaller funds outperformed over the first half of 2023. The greatest difference was the one-year period, at 186 bps, as asset-weighted performance of Chile Equity funds was 20.7%, while equal-weighted was 18.9%.
- The S&P/BMV IRT increased 12.4% over the first half of 2023. For Mexico Equity fund managers, success was particularly elusive in the first half of 2023, as 90.7% of active managers underperformed the S&P/BMV IRT. Although slightly below the H1 2023 level, underperformance rates increased over 3-, 5 and 10-year periods, to 70.7%, 77.3% and 85.0%, respectively.
- Despite the underperformance of most active managers in the first half of the year, the survival rates of active funds in Mexico were the highest of Latin America, at 100.0%, 100.0%, 90.9% and 72.5% over the 1-, 3-, 5- and 10-year periods, respectively.
- Smaller funds performed better than larger funds over all periods, especially over the six-month period, with asset-weighted Mexico Equity funds performance 180 bps below equal-weighted performance.