Top-quartile Canadian funds still lost to their benchmarks in first half 2026

A top-quartile ranking against peers failed to deliver benchmark-beating returns in five of the seven fund categories tracked by the SPIVA Canada Scorecard in the first half of 2026. 

S&P Dow Jones Indices published the mid-year scorecard using data to June 30, 2026, covering Canadian-domiciled actively managed equity funds. 

Funds at the bottom-quartile threshold trailed their benchmarks by an average of 7.3 percent across categories, reaching 10.7 percent in Canadian Focused Equity. 

The pattern extends beyond a single period. 

The Canada Persistence Scorecard for year-end 2025, also published by S&P Dow Jones Indices, found that in all seven categories one-quarter of funds or fewer stayed in the top quartile across two consecutive five-year periods, below the 25 percent that a random distribution would produce. 

An average of 80 percent of active funds across all categories underperformed their benchmarks over the six months.  

Canadian Equity funds recorded the weakest result among the four domestic categories. 

Benchmarks are the S&P/TSX Composite Index, a blend of 50 percent S&P/TSX Composite with 25 percent S&P 500 and 25 percent S&P EPAC LargeMidCap, the S&P/TSX Canadian Dividend Aristocrats Index and the S&P/TSX Completion Index respectively. 

The 87 percent Canadian Equity rate sits above the 81.8 percent average across each of the past 10 calendar years, a span that includes two years of negative benchmark performance.  

It falls below the 93.4 percent recorded for the full year 2025, when the S&P/TSX Composite climbed 31.7 percent, according to the year-end 2025 edition of the scorecard. 

Canadian Dividend and Income Equity recorded a 64 percent underperformance rate over one year, the lowest figure of any category over that horizon.  

On a risk-adjusted basis, measured as annualised average monthly return divided by annualised standard deviation of monthly return, 53.85 percent of the category trailed its benchmark over 10 years. 

That 10-year risk-adjusted figure is the only one in the report below 85 percent. 

The comparable Canadian Equity figure is 96.08 percent, and Canadian Focused Equity is 98.08 percent. 

Over longer absolute-return horizons the dividend category reverts to the pattern, at 89.5 percent over three years, 85 percent over five and 96.9 percent over 10.  

Canadian Equity underperformance reached 98.8 percent over 10 years.  

Every Canadian Focused Equity fund in the 10-year opportunity set failed to beat its blended benchmark. 

Merger and liquidation rates stayed in single digits across all categories during the first half of 2026.  

Over 10 years, 43.9 percent of Canadian Equity funds failed to survive and 37.5 percent of funds disappeared across all categories. 

Canadian Focused Equity recorded the lowest 10-year survivorship of any category at 42.57 percent, from an opening universe of 101 funds.  

Canadian Dividend and Income Equity was highest at 70.77 percent, from 65 funds.  

The scorecard counts funds that did not survive a measured period as underperformers, using the full opportunity set at the start of the period as the denominator. 

A 2026 paper by KJ Martijn Cremers of the University of Notre Dame, Jon Fulkerson of the University of Dayton and Timothy B. Riley of the University of Arkansas argues that the SPIVA methodology understates active fund performance.  

Riley said the authors identify “substantially more value” after modifying the scorecard’s empirical choices to align with investor experience, in remarks carried by the Investment Adviser Association in May. 

The paper examines the SPIVA US Scorecard rather than the Canadian edition.  

Its authors report that 43 percent of US domestic equity assets outperformed over the five years ending 2024 under their methodology, against the 15 percent SPIVA reported.