The index approach has shown better performance than that offered by the majority of other players in Belgium since 2012, for comparable risk profiles and for all investment horizons between 1 and 10 years. 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 10,9%, which is 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 all periods analyzed (1, 3, 5 and 10 years). You can find more details about the non-speculative approach and the performance of the funds examined in the infographic below.
We note a general outperformance over the 2019-2021 period, thanks to the positive impact of two outstanding stock market years: 2019 and 2021. Over these two years, the world stock market index increased by 29% and 27% respectively! Such results largely compensate for the weaker performances – nevertheless positive – of the year 2020, marked by the COVID-19 pandemic.
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.
This article was written when easyvest was authorized and regulated by the FSMA as an agent in banking and investment services. Today, easyvest is a brand of EASYVEST NV/SA, authorized and regulated by the Belgian Financial Services and Markets Authority, with company number BE0631.809.696, as a portfolio management company and as a broker in insurances, with its registered office in Rue Gachard 59, 1050 Brussels, Belgium. Copyright 2023 EASYVEST NV/SA.