Right ...
Hi,
'Hello, Nsikan!'
Attached you will find a review of the relative performance of active managed equity funds and ETFs compared to their respective fund manager benchmarks, as well as to the Lipper assigned technical indicators.
Right. And, uh ... who prepared the PDF, Nsikan?
Nsikan?
Lucky.
Right.
Great.
Just great.
'Don't get upset, boss.'
Yeah, yeah.
The study covers all equity funds globally.
The majority of actively managed funds and ETFs globally were not able to beat their respective fund manager benchmarks over the course of the year 2023.
The overall average relative underperformance of ESG-related equity funds versus their fund manager benchmarks (-1.93%) was higher than for their conventional peers (-1.08%).
The overall average relative underperformance of ESG-related equity funds versus their Lipper assigned technical indicators (-4.46%) was higher than for their conventional peers (-3.05%).
For the evaluation of the relative performance of actively managed funds versus an index/benchmark, one needs to take fees and expenses into account since indices and benchmarks are calculated without taking any fees or expenses into consideration. The average total expense ratio (TER) of all equity funds covered by this report was 1.545%.
'That wasn't too bad.'
That was Nsikan.
'Of course.'
This is Lucky -
Performance review relative performance equity funds 2023 2 executive summary the majority of actively managed funds and ETFs globally were not able to beat their respective fund manager benchmarks over the course of the year 2023 the overall average relative underperformance of ESG related equity funds versus their fund manager benchmarks -1 93% was higher than for their conventional peers! -1 08% the overall average relative underperformance of ESG related equity funds versus their Lipper assigned technical indicators -4 46% was higher than for their conventional peers -3 05% or the evaluation of the relative performance of actively managed funds versus an index benchmark one needs to take fees and expenses into account since indices and benchmarks are calculated without taking any fees or expenses into consideration the average total expense ratio TER of all! equity funds covered by this report was 1 545% performance review relative performance equity funds 2023 3 contents executive summary 2 performance review relative performance equity funds 2023 4 methodology! 5 results relative performance of actively managed funds versus their fund manager benchmarks 6 results relative performance of actively managed funds versus their technical -
Let me stop you there, Lucky!
what is it
Take a breath, mate.
all right
Go on then.
indicators 9 performance review relative performance equity funds 2023 4 performance review relative performance equity funds 2023 its fair to say that 2023 was a year! in which active fund managers could have shown their asset selection and timing skills since the markets were driven by a number of different factors each of these factors could have caused a major market downturn on their own there were a lot of geopolitical tensions around the globe beside the war in Ukraine which showed that democratic states are more vulnerable than one may think also there were economic factors which burdened the expectations of investors such as Chinas! failure to meet the growth expectations of investors when its economy was reopened after the end of the countrys zero THING strategy talking about China the credit crisis in the Chinese real estate sector later in the year was another factor that could have caused a market downturn if it wasnt handled well by the Chinese government nevertheless investors! are still cautious about investments in China after the meltdown in the bond segment during the interest hiking cycle over the course of 2022 investors hoped that the measures taken by central banks would bring down inflation and lead to falling interest rates this assumption went against The hawkish!!! statements of central banks around the globe for the first 10 months of 2023 the relatively high interest rates raised fears that some major economies such as the U S would face a hard landing in addition to this some investors might have recalled bad memories! when the Silicon Valley bank and two other regional banks were closed in early March 2023 these feelings! might have become worse when Credit Suisse struggled later in the month and was finally taken over by UBS by governmental order on the other hand the spectacular! performance of the so called magnificent seven alphabet Amazon Apple Meta Microsoft Nvidia and Tesla drove the U S markets up the stellar! performance of these stocks might have reminded some investors of the performance of some stocks before the burst! of the so called dot com bubble as a result many investors might have been caught between fear and greed! when looking at the u s equity markets that said some major equity indices reach new all time high values at the end of year 2023 despite all the headwinds over the course of the year with these facts in mind 2023 can be seen as a year in which active asset managers had the chance to deliver a high value added compared to passive strategies by using cash as a risk buffer! in times of market turmoil and investing in high beta stocks in an upswing of the market in general the results of this study show that active equity fund managers did not achieve this goal since this study was conducted over a limited time period the results have only a limited prediction power for the long term results of active managers nevertheless studies over -
Lucky!
different time periods have shown similar patterns
performance review relative performance equity funds 2023 5 methodology the analyzed fund universe has been derived from all mutual funds and ETFs listed in the Lipper database with the asset type equity assigned from this universe we excluded all passive products as well as all convenience share classes and all leveraged products we also excluded all funds which have been liquidated or merged during the year as there is no complete performance history for these products for the analyzed time period passive funds were excluded from this comparison as the aim of the analysis is to show whether actively managed funds in general and ESG related products in particular were able to add value over the course of 2023 in this regard the inclusion of passive products would have skewed the results since the expected return of a passive product is the return of the index minus the total expense ratio of the respective fund we used the fund manager! benchmark and in a second analysis the technical indicator as reference to calculate the relative performance of the respective actively managed funds between January 1 2023 and December 31 2023 a closer look at the number! of funds in each analysis shows that it is worth conducting a second analysis as a large number of funds do not disclose their benchmarks or use a benchmark that is not available in the Lipper database since the analysis includes funds from all parts of the world the base currency for all calculations is the u s dollar since not all funds have or disclose a benchmark Lipper has assigned standard market benchmarks as technical indicators for all Lipper global classifications which allow relative calculations to be performed even when the fund manager benchmark is missing one! example of this is the Lipper global classification LGC equity global where we assigned the MSCI global TR USD as technical indicator for all funds with a plain vanilla global equity investment objective funds with a more specific investment objective will receive an individual technical indicator which is more suitable than the generally assigned plain vanilla index although a technical indicator is quite helpful for the analysis of a complete peer group it has some flaws as the respective benchmark may not represent all restrictions applied on the fund level this is especially true with regard to ESG SRI funds since a standard market benchmark does not take any ESG SRI criteria into consideration and may have therefore a deviant
Lucky?
Ive finished
Okay. Well done.
'Nice one, Lucky!'
see ya guys
Yeah, bye.
ENDS
ENDS
ENDS
