In 2017, the majority of active managers in all regions could outperform their respective indices gross of fees. The main reason for this outperformance was a style bias of most active managers. Over the whole year, most of the active managers had a growth bias in their portfolio and growth stocks outperformed value stocks significantly. In addition to that, mid-caps showed in Europe a better performance than large caps and most European managers have an overweight in this market cap cluster.
On a net basis though, after deductions of fees, the picture changes significantly and only emerging markets managers still outperformed slightly. 52% of emerging market managers, 42% of Europe managers and 37% of US managers have been able to outperform their benchmarks. Nevertheless, results are much better than in 2016, where only 8% of Europe managers, 14% of US managers and 39% of emerging markets managers could beat their benchmarks net of fees.
In December 65% of US managers, 40% of Europe managers and 37% of emerging markets managers could outperform their benchmarks net of fees. The good results in the US were mainly driven by good stock selection.
Please find the full fundinfo Research News – January 2018 edition including a summary of manager meetings attached on the left.