Only 31.2% of Canadian equity active fund managers outperformed the S&P/TSX Composite Index during the second quarter of 2008, according the latest results for the Standard & Poor’s Indices Versus Active Funds Scorecard (SPIVA) for Canada.

Active managers in the small/mid cap equity category fared better with 57.7% beating the S&P/TSX completion index.

Similarly, in the Canadian focused equity category 51.7% of active funds outperformed the blended benchmark of 50% S&P/TSX composite + 25% S&P 500 + 25% S&P/Citigroup EPAC PMI.

“This latest SPIVA results highlight the volatility of shorter-term outperformance for active funds,” says Jasmit Bhandal, director at Standard & Poor’s. “When compared to Q1 2008, some active funds fared better than their respective benchmark during the second quarter; however, a review of performance over the long-term indicates that a majority of active funds continue to underperform their respective benchmarks.”

SPIVA reports the performance of actively managed Canadian mutual funds corrected for survivorship bias, and shows equal- and asset-weighted peer averages.

SPIVA results for the second quarter of 2008 showed mixed results in mutual funds investing outside of Canada. While 51.2% of active U.S. equity funds outperformed the S&P 500, only 31.8% of international equity funds outperformed the S&P/Citigroup EPAC PMI Index and 55.9% of global equity funds outperformed the S&P/Citigroup World PMI Index.

The majority of active funds underperformed their respective S&P benchmark over one, three- and five-year periods. Only 15.2%, 11.6% and 6% respectively, of active Canadian equity funds were able to outperform the S&P/TSX composite Index over these periods respectively.

For active funds in the Canadian focused equity category 47.8%, 41.7% and 49.4% of funds outpaced the blended S&P/TSX composite benchmark index over the one, three- and five-year periods respectively.