More than 80 per cent of Australian active fund managers failed to beat their comparable benchmarks in the 10 years to 31 December 2016, according to new S&P Dow Jones Indices data.
The SPIVA Scorecard, published by S&P Dow Jones Indices since 2002, found more than 80 per cent of international equity and Australian bond funds, and more than 70 per cent of Australian general equity and A-REIT funds, underperformed their respective benchmarks over the past decade.
Looking at 2016 in isolation, Australian large-cap equity funds posted an average return of 9.2 per cent and the S&P/ASX200 gained 11.8 per cent, with 76 per cent of funds underperforming the index.
Over five and 10-year periods, 70 per cent and 74 per cent of Australian large-cap equity funds failed to beat the S&P/ASX200, respectively.
Mid and small-cap Australian equity funds have done markedly better than their large-cap counterparts, with 52 per cent and 67 per cent of mid and small-caps outperforming their benchmarks over the past five and 10 years, respectively.
But when it comes to Australian-domiciled international equity funds, Australian bond funds and Australian A-REIT funds, all have underperformed their benchmarks over the past decade.
In 2016, 4.8 per cent of Australian active funds monitored by SPIVA were merged or liquidated.
"International equity funds disappeared at the fastest rate, while Australian bond funds had the highest survival rate," said the report.