Stock-pickers like to argue that index funds are all very well in bull markets, but active fund managers earn their keep in bear markets. So how did European active managers do during the recent market chaos?

Not good, according to the latest scorecard from S&P Dow Jones Indices. March was one of the most volatile months in history, but fund managers were unable to take advantage of the market opportunities – two-thirds underperformed their European benchmark and European funds lost 15.5 per cent, compared to a 14.1 per cent decline in the S&P Europe 350.

Performance

They did a little better in January and February, but their overall performance was mediocre – active European funds fell 22.7 per cent in the first quarter, compared to a 22.4 per cent decline in the index. More than half – 57 per cent – underperformed the index.

Market volatility supposedly “provides a better opportunity for active managers to outperform”, says Andrew Cairns of S&P Dow Jones Indices. Unfortunately for ordinary investors who bought into this idea, the data suggests otherwise.