More than half of the so-called balanced funds into which Danes put their money have not been able to meet their benchmark, according to Danish media Finans, citing a study from Saxo Bank.

Balanced funds invest in equities as well as bonds, and since 2012, total assets in this type of fund have risen 143 percent. According to the Danish Investment Association (IFB), DKK 93 billion (EUR 12.5 billion) is now placed in balanced funds. Saxo Bank has analyzed the returns over a span of three years in the 40 balanced funds which have a rating from the analyst agency Morningstar. The study shows that 24 funds have under-performed – meaning that they generated lower returns than the benchmark they are measured on – while 16 funds outperformed.

"This is another study that shows that the actively-managed funds struggle to generate excess returns after expenses. As a customer you ought to expect that funds would cover their own costs in relation to the benchmark over a span of three years. If you can't do that, it raises the question of whether you are too expensive or not good enough. Then you can assess whether it's because the manager was defensive in order to protect customers, and that should be respected," Teis Knuthsen, CIO of Saxo Bank, tells Finans.

Several of the companies, which have had underperforming funds, raise doubts about the method of calculation. One such company is Bankinvest, where two out of three funds have under-performed, according to the study. Chief Executive Lars Bo Bertram tells Finans that if you measure by the fund's official benchmarks, then two out of three of Bankinvest's funds actually outperformed.

English Edit: Gretchen Deverell Pedersen