"PAST performance is no guarantee of future returns." These words any investor — individual or institutional — will see on fund fact sheets or other literature produced by fund managers, writes Johann Barnard.This prudent cautionary notice is not only a regulatory requirement but also an indication of the market swings fund managers have to navigate. While the warning is equally applicable to active and passive funds, selective data shows that the need for caution in actively managed funds is greater.According to the S&P Indices Versus Active (Spiva) SA Scorecard for 2015, active managers have consistently underperformed S&P benchmark indices over the past five years. And the longer the time frame, the worse their performance.According to the report, which was released at the beginning of April, global equity-focused funds showed the worst performance (as measured against the S&P global 1200 index) over the five-, three-and one-year periods. The returns, that showed that 96%, 81% an...
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