Holy survivorship bias

[ats5g]

From the 8/24/2006, Index Versus Active Funds Scorecard for Canadian Funds:

Five-year survivorship ranges from 60% to 66% for the Canadian
Equity, Canadian SmallCap and U.S. Equity fund categories. This
suggests that approximately one in three funds in these three categories
has merged or liquidated in the past five years. Three-year
survivorship is between 53% and 78%.

Survivorship over the five-year horizon is 63.3%, 60.2% and 65.8% for Canadian Equity, U.S.
Equity and Canadian Small Cap funds, respectively. The corresponding survivorship figures
over the three-year horizon are 74%, 53.2% and 77.8%.

On a seperate note, I guess I shouldn't be surprised at the lack of active outperformance since Canadian mutual funds generally charge a whole lot.

- Alec