Active and passive equity Ucits performance varies significantly by industry sector, with no clear winner, according to the European Fund and Asset Management Association (Efama).
The report by the voice of the European asset management industry, Efama, analysed the net performance of equity Ucits funds across various industry sectors over a ten-year period (2014-2023).
Key findings from the report revealed differences in the net performance of equity Ucits funds depending on the industry sector. While passive equity funds generally outperformed active funds across the entire equity fund universe, this trend is not consistent across all sectors. In certain cases, active funds outperform their passive counterparts, and vice versa, depending on the sector, the year, and the investment time horizon, sector, the year, and the time horizon. According to the Efama report, these findings remain robust even after accounting for return volatility.
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“Our analysis reveals significant differences in the average net performance of sectoral equity funds, with neither passive nor active funds consistently outperforming the other,” said Vera Jotanovic, senior economist at Efama. These findings remain robust even after accounting for return volatility, highlighting the complexities of fund performance in various sectors.
The report underscores the importance of looking beyond broad generalizations when comparing active and passive funds. Efama’s senior director, Bernard Delbecque, emphasised the need for tailored investment decisions: “Given the high diversity among investment funds, retail investors should seek professional guidance before allocating their savings into specific equity funds, ensuring their choices align with their individual investment goals and preferences.”
