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Canadian equity indexes ended 2014 on a positive note. As of Dec. 31, 2014, the headline Canadian equities indexes, the S&P/TSX composite and the S&P/TSX 60, continued their winning streak from the previous year and registered gains of 10.55 per cent and 12.27 per cent, respectively. Rising markets proved to be difficult for active managers to overcome, as the majority of Canadian active managers saw their returns lag behind the benchmark, with just 26.47 per cent of Canadian Equity Funds outperforming the S&P/TSX composite.
Similarly, only 15.56 per cent of managers in the Canadian Focused Equity category outpaced the blended index, which comprises 50 per cent of the S&P/TSX composite, 25 per cent of the S&P 500®, and 25 per cent of the S&P EPAC LargeMidCap. The one-year results for several Canadian equity categories were equally unfavorable, as 39.13 per cent of actively managed funds in the Canadian Small-/Mid-Cap Equity category and 6.67 per cent of actively managed funds in the Canadian Dividend & Income category outperformed their respective benchmarks.
Over the longer term, such as the five-year investment horizon, the results are unequivocal across all domestic equity categories. The data shows the losing pattern repeating across all categories, as the majority of active managers underperformed their benchmarks.
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