Actively managed mutual funds in the Canadian equity and U.S. equity fund categories lagged indices in the last quarter of 2006, Standard & Poor’s said today.

According to the Standard & Poor’s Indices Versus Active Funds Scorecard (SPIVA) for Canada, just 36.4% of Canadian equity funds beat the S&P/TSX composite index, while only 28.4% of U.S. equity funds outperformed the S&P 500 index (measured in Canadian dollars). In contrast, 65.9% of actively managed Canadian small-cap equity funds outpaced the S&P/TSX small-cap index.

“Looking over longer time periods, indices continue to outperform a majority of active funds,” said Steve Rive, vp of Canadian index services at Standard & Poor’s. “Over the last five years, less than 11% of actively managed Canadian equity funds have beat the S&P/TSX composite index.”

In the same five-year period ended Dec. 31, 2006, only 14.5% of U.S. equity funds have outpaced the S&P 500 index, while 46.5% of actively managed Canadian small-cap funds have outperformed the S&P/TSX small-cap Index.

Five-year average fund returns to the end of 2006 show active funds have underperformed the S&P/TSX composite index and the S&P/TSX capped composite, both on an equal- and asset-weighted basis, by roughly 300 basis points.