Over half of actively-managed funds investing in the UK equity market underperformed in 2014, according to S&P Dow Jones Indices's Europe S&P Indices Versus Active Funds (SPIVA) Scorecard.

Some 55% of actively managed, sterling-denominated funds invested in the UK equity market underperformed the S&P UK BMI in 2014. This represents a significant slip from 2013’s results where only approximately 1 out of 10 (11%) of the funds in this same category.

"Overall, markets were volatile in 2014. The European Central Bank did not announce a quantitative easing programme in its December meeting which caused uncertainty in the market," the report stated.

"Volatile markets are considered to be fertile ground for active fund managers as they could utilise their stock-picking skills to benefit from the perceived discrepancies in the market. However, Europe SPIVA 2014 suggests that active fund managers struggled to do so last year."

UK small-cap funds posted a bad year with 72% trailing the benchmark. However, UK large- and mid-cap funds posted higher returns than their benchmarks with only 42% underperforming.

Actively-managed sterling denominated funds invested in European equities did better than their euro currency counterparts, with only 39% of the former underperforming the S&P Europe 350 compared to 83% of the euro currency versions underperforming the benchmark.

The majority of actively managed US, Global and Emerging Market equity funds denominated in sterling also trailed their benchmarks, with 84% of actively managed funds invested in US equities failed to beat the S&P 500, 85% of actively managed funds invested in global equities trailed the S&P Global 1200 and 63% of actively managed funds invested in emerging markets underperformed the S&P / IFCI in 2014.

The results for the SPIVA Scorecard, issued semi-annually, tracks the performance of actively-managed funds against their relevant S&P benchmarks.