The index approach has shown better performance than that offered by the majority of other players in Belgium since 2012, for comparable risk profiles. In the case of an asset allocation predominantly in equities, the index approach would have generated over 10 years an average annual return net of fees of 10,7%, higher than all comparable investment solutions considered.
Whatever the risk profile considered (each profile corresponding to a certain allocation of assets as defined in the infographic), the index approach emerges as the best over periods of 5 and 10 years. Over 10 years, the non-speculative approach has thus generated an additional annual return compared to the flagship capitalization funds offered by the majority of the Belgian banks. You can find more details about the non-speculative approach and the performance of the funds examined in the infographic below.
The significant differences in performance between the passive approach and traditional active management are mainly explained by the riskier investment decisions taken by active managers who try to beat the market, the frictions associated with the active management of a portfolio (e.g. transaction fees, taxes on stock market transactions), as well as the high fees charged by traditional players.
We detailed the methodology and the sources of this analysis below in the main infographic of the blog post.
Note: This article was written when Easyvest was authorized and regulated by the FSMA as an agent in banking and investment services.