After lagging virtually every other investment style for years, active managers have finally come into their own. In 2001 actively managed pension funds outperformed index funds in most of the major markets, according to research by the WM Company. The study was based on the WM All Funds Universe composed of 1,009 UK pension funds with equity holdings of 291 billion at the end of last year.
“Our study examined the performance of UK pension funds and shows that 2001 was a good year for active investors in aggregate who managed to outperform the indices in the UK, US, Europe (ex UK) and Japan,” says Alastair MacDougall, head of Research at WM. “Their relative performance was superior to index funds, but everyone suffered from the bear market in equities. Long-term figures continue to show that, on average, passive managers perform better.”
The study, entitled ” A comparison of active and passive management,” builds on previous research work by WM, and includes ten years of data for the UK market.