Passive equity funds are delivering superior returns compared to actively managed portfolios across major Nordic banks, according to a new analysis by Kauppalehti.
The Finnish financial daily constructed model portfolios using equity funds from Nordea, OP Financial Group, Danske Bank, and S-Pankki to test performance across different management styles.
The findings indicate that low-cost, index-tracking strategies have consistently outperformed the active funds offered by these banking giants, a trend that is reshaping how investors allocate capital in the region.
The study highlights a growing disconnect between the fees charged for active management and the value delivered to retail and institutional investors.
While the banks continue to promote their active equity products, the data suggests that a simple, diversified portfolio of passive funds can achieve better risk-adjusted returns.
This underperformance is particularly notable given the resources and expertise these institutions deploy in their active strategies.