Danish investment associations beat European averages, notes IFR

The Federation of Danish Investment Associations says Morningstar analysis points to significantly better performance of domestic funds compared with others across Europe, with figures suggesting that half of the funds analysed have outperformed the market over relevant time horizons, against a European average of just 20%.

“The analysis confirms what we have seen before, namely that Danish funds are good at investing or at finding good managers. That is also why Denmark throughout 2012 was in first place in Morningstar’s European ranking list, said Jens Jørgen Holm Møller, managing director of the Federation (InvesteringsForeningsRådet).

Morningstar’s analysis of the Danish funds market was focused on actively managed Danish domiciled funds offering DKK share classes. It included both funds currently available on the market, as well as those that are either closed or merged into others – with a focus on performance over 3, 5, 7 and a maximum of 10 years.

Besides the ability for Danish actively managed funds to outperform their benchmarks, the research also found so-called survivorship bias, which suggests that funds that survive over time do perform better than those that have been shut down.

The survivorship bias affects the overall results, but even accounting for this, Morningstar’s report said that Danish funds tend to do better than the European average.

Looking at the issue of how markets themselves have affected performance of funds, the report said Danish equity, emerging markets and global equity are some of the more successful markets for investors, while US, Japanese and European equity have performed less well.

Click here to see the full report (in Danish): Morningstar aktiv forvaltning

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