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Research Report

Large cap fund managers outperform TSX four quarters in a row Add to ...

Globe editors have posted this research report with permission of Russell Investments. This should not be construed as an endorsement of the report’s recommendations. For more on The Globe’s disclaimers please read here. The following is excerpted from the report:

For the fourth consecutive quarter, the majority of large cap investment managers in Canada added value and beat the benchmark. In the third quarter of 2013, 74 per cent of large cap managers outperformed the S&P/TSX composite index, following a record 96 per cent in the second quarter. In the third quarter, the median large cap manager return was 7 per cent, compared to the S&P/TSX composite index’s return of 6.2 per cent.

The last time we experienced four consecutive quarters in which large cap managers beat the benchmark was the second quarter of 2007 and overall that environment was not nearly as strong as what has been observed this time. In the most recent four quarters, an average of 83 per cent of large cap managers beat the benchmark with the median manager return ahead of the benchmark by roughly 150 basis points on average. That is significantly stronger than in 2007 when an average of 57 per cent of large cap managers beat the benchmark in four consecutive quarters by an average of 30 basis points.

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