Business · Markets · 7 hrs ago
87% of Canadian equity funds trailed the TSX in first half of 2026
A scorecard found 87 per cent of active Canadian equity funds lagged the TSX Composite in the first half of 2026.
The figure was higher than the average of 81.8 per cent over the previous 10 calendar years.
The funds returned an average 8.8 per cent, compared with 11.2 per cent for the index, after fees.
Active funds are managed by people choosing which stocks to buy, while an index fund aims to track a benchmark such as the broad S&P/TSX Composite.
The gap between winning and losing stocks widened, which can create chances for stock-pickers but also increase losses when their choices fall behind.
The scorecard’s authors said that fees and the dominance of a few large stocks make beating the index difficult; the top five TSX stocks accounted for about 33 per cent of its return in the first half.
One portfolio manager said investors may benefit from managers who hold different stocks and adapt as market leaders change.
87 per cent of actively managed Canadian equity funds underperformed the S&P/TSX Composite in the first half of 2026, according to an S&P Dow Jones Indices report.
The share was above the 81.8 per cent average for the previous 10 calendar years.
Canadian active funds returned an average of 8.8 per cent, compared with an 11.2 per cent gain for the index.
The report said stock performance dispersion increased, creating potential opportunities for active investors but also greater downside risk.
Index concentration and fees were cited as challenges for active managers.
- Who
- Actively managed Canadian equity funds.
- What
- 87 per cent underperformed the S&P/TSX Composite in the first half of 2026.
- When
- The first six months of 2026.
- Where
- Canada.
- Why
- The report cited challenges including fees, index concentration and the difficulty of picking winning stocks.
This story does not have two clearly opposing sides.
Canadian active equity funds returned an average of 8.8 per cent, while the S&P/TSX Composite gained 11.2 per cent.
S&P Dow Jones Indices released its SPIVA Canada Mid-Year 2026 Scorecard.
- Underperforming Canadian active funds
- 87 per cent
- S&P/TSX Composite gain
- 11.2 per cent
- Average return for Canadian active funds
- 8.8 per cent
- Previous 10-year average underperformance
- 81.8 per cent
- Underperforming active large-cap U.S. funds
- 67 per cent
What people are saying
it can be “hard mathematically” to reliably pick winning stocks when they are in the minority
There are some consistent forces that are difficult for anyone trying to trade actively, including managers or individuals, and I think one of those forces is concentration
It’s true that the benchmark is difficult to beat
You want to have exposure to truly active managers who are different and are willing to change their portfolio as these leadership trends change