The majority of actively managed mutual funds in the Canadian and U.S. Equity categories underperformed their respective benchmarks in the first quarter of 2005, according to the latest report from Standard & Poor’s.

As determined by Standard & Poor’s Indices Versus Active Funds Scorecard (SPIVA) for Canada, returns for the first three months of the year show 23% of actively managed Canadian equity funds have outperformed the S&P/TSX composite index.

Results were better in the U.S. Equity category, with 38% of U.S. equity funds outperforming the S&P 500 index (measured in Canadian dollars). Actively managed Canadian small cap funds fared best of all in first-quarter 2005, with 63% beating the S&P/TSX small cap index.

“The SPIVA scorecard goes beyond simple performance numbers of each fund category to report detailed apples-to-apples comparisons corrected for survivorship bias,” said Steve Rive, vp of Canadian Index Services at Standard & Poor’s, in a release. “Over longer periods of time, such as three or five years, the SPIVA scorecard shows the majority of Canadian active mutual funds in every category being outpaced by indices.”

SPIVA Canada results show that over the last five years 43.5% of actively managed Canadian mutual funds in the Canadian equity category have outperformed the S&P/TSX composite index, 28.8% of actively managed mutual funds in the Canadian small cap category have outperformed the S&P/TSX small cap index, and 23.4% of actively managed mutual funds in the U.S. equity category have outperformed the S&P 500 Index. Five-year average fund returns show active funds outperforming the S&P/TSX composite index on average and underperforming the S&P/TSX capped composite, both on an equal- and asset-weighted basis.