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Mapped: Global Energy Prices, by Country in 2022

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How to use: Arrows on side navigate between each type of energy.

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Main- Electricity Prices for Households
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Energy Prices

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Mapped: Global Energy Prices, by Country in 2022

For some countries, energy prices hit historic levels in 2022.

Gasoline, electricity, and natural gas prices skyrocketed as Russiaโ€™s invasion of Ukraine ruptured global energy supply chains. Households and businesses are facing higher energy bills amid extreme price volatility. Uncertainty surrounding the war looms large, and winter heating costs are projected to soar.

Given the global consequences of the energy crisis, this Markets in a Minute from New York Life Investments shows the price of energy for households by country.

1. Global Energy Prices: Gasoline

Which countries and regions pay the most for a gallon of gas?

RankCountry/ RegionGasoline Prices
(USD per Gallon)
1๐Ÿ‡ญ๐Ÿ‡ฐ Hong Kong$11.1
2๐Ÿ‡จ๐Ÿ‡ซ Central African Republic$8.6
3๐Ÿ‡ฎ๐Ÿ‡ธ Iceland$8.5
4๐Ÿ‡ณ๐Ÿ‡ด Norway$8.1
5๐Ÿ‡ง๐Ÿ‡ง Barbados$7.8
6๐Ÿ‡ฉ๐Ÿ‡ฐ Denmark$7.7
7๐Ÿ‡ฌ๐Ÿ‡ท Greece$7.6
8๐Ÿ‡ซ๐Ÿ‡ฎ Finland$7.6
9๐Ÿ‡ณ๐Ÿ‡ฑ Netherlands$7.6
10๐Ÿ‡ง๐Ÿ‡ช Belgium$7.4
11๐Ÿ‡ฌ๐Ÿ‡ง United Kingdom$7.2
12๐Ÿ‡ช๐Ÿ‡ช Estonia$7.2
13๐Ÿ‡จ๐Ÿ‡ญ Switzerland$7.2
14๐Ÿ‡ธ๐Ÿ‡ฌ Singapore$7.2
15๐Ÿ‡ธ๐Ÿ‡ช Sweden$7.1
16๐Ÿ‡ธ๐Ÿ‡จ Seychelles$7.1
17๐Ÿ‡ฎ๐Ÿ‡ฑ Israel$7.0
18๐Ÿ‡ฉ๐Ÿ‡ช Germany$7.0
19๐Ÿ‡บ๐Ÿ‡พ Uruguay$7.0
20๐Ÿ‡ผ๐Ÿ‡ซ Wallis and Futuna$7.0
21๐Ÿ‡ฑ๐Ÿ‡ฎ Liechtenstein$6.9
22๐Ÿ‡ฎ๐Ÿ‡ช Ireland$6.8
23๐Ÿ‡ต๐Ÿ‡น Portugal$6.8
24๐Ÿ‡ฑ๐Ÿ‡ป Latvia$6.7
25๐Ÿ‡ง๐Ÿ‡ฟ Belize$6.7
26๐Ÿ‡ฆ๐Ÿ‡ฑ Albania$6.6
27๐Ÿ‡ฆ๐Ÿ‡น Austria$6.6
28๐Ÿ‡ฒ๐Ÿ‡จ Monaco$6.6
29๐Ÿ‡ช๐Ÿ‡ธ Spain$6.6
30๐Ÿ‡จ๐Ÿ‡ฟ Czech Republic$6.5
31๐Ÿ‡ฒ๐Ÿ‡ผ Malawi$6.5
32๐Ÿ‡ฐ๐Ÿ‡พ Cayman Islands$6.4
33๐Ÿ‡ธ๐Ÿ‡ฐ Slovakia$6.4
34๐Ÿ‡ฒ๐Ÿ‡บ Mauritius$6.3
35๐Ÿ‡ฑ๐Ÿ‡บ Luxembourg$6.3
36๐Ÿ‡ฑ๐Ÿ‡น Lithuania$6.3
37๐Ÿ‡ฆ๐Ÿ‡ฉ Andorra$6.3
38๐Ÿ‡ฎ๐Ÿ‡น Italy$6.3
39๐Ÿ‡บ๐Ÿ‡ฌ Uganda$6.2
40๐Ÿ‡ญ๐Ÿ‡บ Hungary$6.2
41๐Ÿ‡ฏ๐Ÿ‡ด Jordan$6.2
42๐Ÿ‡ธ๐Ÿ‡พ Syria$6.1
43๐Ÿ‡ซ๐Ÿ‡ท France$6.0
44๐Ÿ‡ง๐Ÿ‡ฎ Burundi$6.0
45๐Ÿ‡ง๐Ÿ‡ธ Bahamas$6.0
46๐Ÿ‡ณ๐Ÿ‡ฟ New Zealand$5.8
47๐Ÿ‡ธ๐Ÿ‡ฒ San Marino$5.8
48๐Ÿ‡ญ๐Ÿ‡ท Croatia$5.8
49๐Ÿ‡ท๐Ÿ‡ด Romania$5.7
50๐Ÿ‡พ๐Ÿ‡น Mayotte$5.7
51๐Ÿ‡ท๐Ÿ‡ผ Rwanda$5.7
52๐Ÿ‡ฟ๐Ÿ‡ฒ Zambia$5.7
53๐Ÿ‡ท๐Ÿ‡ธ Serbia$5.7
54๐Ÿ‡ฑ๐Ÿ‡ฆ Laos$5.6
55๐Ÿ‡ฒ๐Ÿ‡ณ Mongolia$5.6
56๐Ÿ‡ฐ๐Ÿ‡ช Kenya$5.6
57๐Ÿ‡จ๐Ÿ‡พ Cyprus$5.6
58๐Ÿ‡ฏ๐Ÿ‡ฒ Jamaica$5.5
59๐Ÿ‡ฒ๐Ÿ‡ฐ Northern Macedonia$5.5
60๐Ÿ‡จ๐Ÿ‡ฑ Chile$5.5
61๐Ÿ‡ง๐Ÿ‡ฆ Bosnia$5.5
62๐Ÿ‡ฑ๐Ÿ‡จ Saint Lucia$5.5
63๐Ÿ‡ต๐Ÿ‡ฑ Poland$5.4
64๐Ÿ‡ฉ๐Ÿ‡ด Dominican Republic$5.4
65๐Ÿ‡จ๐Ÿ‡ฆ Canada$5.4
66๐Ÿ‡ฒ๐Ÿ‡ฆ Morocco$5.4
67๐Ÿ‡ฆ๐Ÿ‡ผ Aruba$5.4
68๐Ÿ‡ธ๐Ÿ‡ฎ Slovenia$5.4
69๐Ÿ‡ง๐Ÿ‡ฌ Bulgaria$5.3
70๐Ÿ‡ต๐Ÿ‡ช Peru$5.3
71๐Ÿ‡ฑ๐Ÿ‡ฐ Sri Lanka$5.3
72๐Ÿ‡จ๐Ÿ‡ท Costa Rica$5.2
73๐Ÿ‡ฒ๐Ÿ‡ฌ Madagascar$5.2
74๐Ÿ‡ฌ๐Ÿ‡ณ Guinea$5.2
75๐Ÿ‡ณ๐Ÿ‡ต Nepal$5.2
76๐Ÿ‡ฒ๐Ÿ‡ฟ Mozambique$5.2
77๐Ÿ‡ณ๐Ÿ‡ฎ Nicaragua$5.2
78๐Ÿ‡ฒ๐Ÿ‡ฑ Mali$5.1
79๐Ÿ‡ธ๐Ÿ‡ณ Senegal$5.1
80๐Ÿ‡บ๐Ÿ‡ฆ Ukraine$5.2
81๐Ÿ‡ฉ๐Ÿ‡ฒ Dominica$5.0
82๐Ÿ‡ฒ๐Ÿ‡ช Montenegro$5.0
83๐Ÿ‡ฒ๐Ÿ‡น Malta$5.0
84๐Ÿ‡ฒ๐Ÿ‡ฉ Moldova$5.0
85๐Ÿ‡จ๐Ÿ‡ฉ DR Congo$5.0
86๐Ÿ‡จ๐Ÿ‡ผ Curacao$5.0
87๐Ÿ‡จ๐Ÿ‡ป Cape Verde$4.9
88๐Ÿ‡ง๐Ÿ‡ฉ Bangladesh$4.9
89๐Ÿ‡ฑ๐Ÿ‡ท Liberia$4.9
90๐Ÿ‡ฐ๐Ÿ‡ญ Cambodia$4.8
91๐Ÿ‡ฎ๐Ÿ‡ณ India$4.8
92๐Ÿ‡จ๐Ÿ‡บ Cuba$4.8
93๐Ÿ‡ญ๐Ÿ‡ณ Honduras$4.7
94๐Ÿ‡ฌ๐Ÿ‡ช Georgia$4.7
95๐Ÿ‡ฟ๐Ÿ‡ฆ South Africa$4.7
96๐Ÿ‡น๐Ÿ‡ฟ Tanzania$4.7
97๐Ÿ‡ซ๐Ÿ‡ฏ Fiji$4.7
98๐Ÿ‡จ๐Ÿ‡ณ China$4.7
99๐Ÿ‡ฒ๐Ÿ‡ฝ Mexico$4.6
100๐Ÿ‡ฌ๐Ÿ‡น Guatemala$4.6

Source: GlobalPetrolPrices.com. As of October 31, 2022. Represents average household prices.

At an average $11.1 USD per gallon, households in Hong Kong pay the highest for gasoline in the worldโ€”more than double the global average. Both high gas taxes and steep land costs are primary factors behind high gas prices.

Like Hong Kong, the Central African Republic has high gas costs, at $8.6 USD per gallon. As a net importer of gasoline, the country has faced increased price pressures since the war in Ukraine.

Households in Iceland, Norway, and Denmark face the highest gasoline costs in Europe. Overall, Europe has seen inflation hit 10% in September, driven by the energy crisis.

2. Global Energy Prices: Electricity

Extreme volatility is also being seen in electricity prices.

The majority of the highest household electricity prices are in Europe, where Denmark, Germany, and Belgiumโ€™s prices are about double that of France and Greece. For perspective, electricity prices in many countries in Europe are more than twice or three times the global average of $0.14 USD per kilowatt-hour.

Over the first quarter of 2022, household electricity prices in the European Union jumped 32% compared to the year before.

RankCountry/ RegionElectricity Prices
(kWh, USD)
1๐Ÿ‡ฉ๐Ÿ‡ฐ Denmark$0.46
2๐Ÿ‡ฉ๐Ÿ‡ช Germany$0.44
3๐Ÿ‡ง๐Ÿ‡ช Belgium$0.41
4๐Ÿ‡ง๐Ÿ‡ฒ Bermuda$0.40
5๐Ÿ‡ฐ๐Ÿ‡พ Cayman Islands$0.35
6๐Ÿ‡ฏ๐Ÿ‡ฒ Jamaica$0.34
7๐Ÿ‡ฌ๐Ÿ‡ง United Kingdom$0.32
8๐Ÿ‡ช๐Ÿ‡ธ Spain$0.32
9๐Ÿ‡ณ๐Ÿ‡ฑ Netherlands$0.32
10๐Ÿ‡ง๐Ÿ‡ง Barbados$0.32
11๐Ÿ‡ช๐Ÿ‡ช Estonia$0.32
12๐Ÿ‡ฑ๐Ÿ‡น Lithuania$0.31
13๐Ÿ‡ฆ๐Ÿ‡น Austria$0.31
14๐Ÿ‡ฎ๐Ÿ‡น Italy$0.30
15๐Ÿ‡จ๐Ÿ‡ฟ Czech Republic$0.29
16๐Ÿ‡จ๐Ÿ‡ป Cape Verde$0.28
17๐Ÿ‡ฎ๐Ÿ‡ช Ireland$0.28
18๐Ÿ‡ธ๐Ÿ‡ช Sweden$0.27
19๐Ÿ‡ง๐Ÿ‡ธ Bahamas$0.26
20๐Ÿ‡ฌ๐Ÿ‡น Guatemala$0.26
21๐Ÿ‡ฑ๐Ÿ‡ฎ Liechtenstein$0.26
22๐Ÿ‡จ๐Ÿ‡พ Cyprus$0.25
23๐Ÿ‡ท๐Ÿ‡ผ Rwanda$0.25
24๐Ÿ‡ญ๐Ÿ‡ณ Honduras$0.24
25๐Ÿ‡บ๐Ÿ‡พ Uruguay$0.24
26๐Ÿ‡ต๐Ÿ‡น Portugal$0.24
27๐Ÿ‡ธ๐Ÿ‡ป El Salvador$0.23
28๐Ÿ‡ฑ๐Ÿ‡ป Latvia$0.22
29๐Ÿ‡ซ๐Ÿ‡ฎ Finland$0.22
30๐Ÿ‡ฑ๐Ÿ‡บ Luxembourg$0.22
31๐Ÿ‡ง๐Ÿ‡ฟ Belize$0.22
32๐Ÿ‡ฏ๐Ÿ‡ต Japan$0.22
33๐Ÿ‡จ๐Ÿ‡ญ Switzerland$0.22
34๐Ÿ‡ต๐Ÿ‡ช Peru$0.21
35๐Ÿ‡ฐ๐Ÿ‡ช Kenya$0.21
36๐Ÿ‡ฆ๐Ÿ‡บ Australia$0.21
37๐Ÿ‡ง๐Ÿ‡ท Brazil$0.20
38๐Ÿ‡ฒ๐Ÿ‡ฑ Mali$0.20
39๐Ÿ‡ธ๐Ÿ‡ฌ Singapore$0.19
40๐Ÿ‡ท๐Ÿ‡ด Romania$0.19
41๐Ÿ‡ง๐Ÿ‡ซ Burkina Faso$0.19
42๐Ÿ‡ธ๐Ÿ‡ฎ Slovenia$0.19
43๐Ÿ‡ฌ๐Ÿ‡ฆ Gabon$0.19
44๐Ÿ‡ธ๐Ÿ‡ฐ Slovakia$0.19
45๐Ÿ‡ฆ๐Ÿ‡ผ Aruba$0.19
46๐Ÿ‡ฌ๐Ÿ‡ท Greece$0.19
47๐Ÿ‡ซ๐Ÿ‡ท France$0.18
48๐Ÿ‡ณ๐Ÿ‡ฟ New Zealand$0.18
49๐Ÿ‡น๐Ÿ‡ฌ Togo$0.18
50๐Ÿ‡ณ๐Ÿ‡ฎ Nicaragua$0.17
51๐Ÿ‡ป๐Ÿ‡ช Venezuela$0.17
52๐Ÿ‡ต๐Ÿ‡ฆ Panama$0.17
53๐Ÿ‡ต๐Ÿ‡ญ Philippines$0.17
54๐Ÿ‡ต๐Ÿ‡ฑ Poland$0.17
55๐Ÿ‡ฎ๐Ÿ‡ฑ Israel$0.16
56๐Ÿ‡บ๐Ÿ‡ฒ U.S.$0.16
57๐Ÿ‡บ๐Ÿ‡ฌ Uganda$0.16
58๐Ÿ‡ญ๐Ÿ‡ฐ Hong Kong$0.16
59๐Ÿ‡ธ๐Ÿ‡ณ Senegal$0.16
60๐Ÿ‡ฒ๐Ÿ‡ด Macao$0.15
61๐Ÿ‡จ๐Ÿ‡ฑ Chile$0.15
62๐Ÿ‡ฐ๐Ÿ‡ญ Cambodia$0.15
63๐Ÿ‡ฟ๐Ÿ‡ฆ South Africa$0.14
64๐Ÿ‡ฒ๐Ÿ‡บ Mauritius$0.14
65๐Ÿ‡ฒ๐Ÿ‡ฌ Madagascar$0.14
66๐Ÿ‡ญ๐Ÿ‡ท Croatia$0.14
67๐Ÿ‡ฎ๐Ÿ‡ธ Iceland$0.14
68๐Ÿ‡ณ๐Ÿ‡ด Norway$0.13
69๐Ÿ‡ฒ๐Ÿ‡น Malta$0.13
70๐Ÿ‡ฒ๐Ÿ‡ฟ Mozambique$0.13
71๐Ÿ‡จ๐Ÿ‡ด Colombia$0.13
72๐Ÿ‡ง๐Ÿ‡ฌ Bulgaria$0.12
73๐Ÿ‡ฒ๐Ÿ‡ป Maldives$0.12
74๐Ÿ‡จ๐Ÿ‡ท Costa Rica$0.12
75๐Ÿ‡จ๐Ÿ‡ฆ Canada$0.11
76๐Ÿ‡ฒ๐Ÿ‡ผ Malawi$0.11
77๐Ÿ‡จ๐Ÿ‡ฎ Ivory Coast$0.11
78๐Ÿ‡ณ๐Ÿ‡ฆ Namibia$0.11
79๐Ÿ‡ฒ๐Ÿ‡ฆ Morocco$0.11
80๐Ÿ‡น๐Ÿ‡ญ Thailand$0.10
81๐Ÿ‡ฆ๐Ÿ‡ฒ Armenia$0.10
82๐Ÿ‡ฏ๐Ÿ‡ด Jordan$0.10
83๐Ÿ‡น๐Ÿ‡ฟ Tanzania$0.10
84๐Ÿ‡ธ๐Ÿ‡ฟ Swaziland$0.10
85๐Ÿ‡ช๐Ÿ‡จ Ecuador$0.10
86๐Ÿ‡ง๐Ÿ‡ผ Botswana$0.10
87๐Ÿ‡ฉ๐Ÿ‡ด Dominican Republic$0.10
88๐Ÿ‡ฒ๐Ÿ‡ฐ Northern Macedonia$0.10
89๐Ÿ‡ฆ๐Ÿ‡ฑ Albania$0.10
90๐Ÿ‡ฑ๐Ÿ‡ธ Lesotho$0.09
91๐Ÿ‡ธ๐Ÿ‡ฑ Sierra Leone$0.09
92๐Ÿ‡ฎ๐Ÿ‡ฉ Indonesia$0.09
93๐Ÿ‡ง๐Ÿ‡พ Belarus$0.09
94๐Ÿ‡ญ๐Ÿ‡บ Hungary$0.09
95๐Ÿ‡ง๐Ÿ‡ฆ Bosnia & Herzegovina$0.09
96๐Ÿ‡น๐Ÿ‡ผ Taiwan$0.09
97๐Ÿ‡ฐ๐Ÿ‡ท South Korea$0.09
98๐Ÿ‡ฒ๐Ÿ‡ฝ Mexico$0.09
99๐Ÿ‡ท๐Ÿ‡ธ Serbia$0.09
100๐Ÿ‡จ๐Ÿ‡ฉ DR Congo$0.08

Source: GlobalPetrolPrices.com. As of March 31, 2022. Represents average household prices.

In the U.S., consumer electricity prices have increased nearly 16% annually compared to September last year, the highest increase in over four decades, fueling higher inflation.

However, households are more sheltered from the impact of Russian supply disruptions due to the U.S. being a net exporter of energy.

3. Global Energy Prices: Natural Gas

Eight of the 10 highest natural gas prices globally fall in Europe, with the Netherlands at the top. Overall, European natural gas prices have spiked sixfold in a year since the invasion of Ukraine.

RankCountry/ RegionNatural Gas Prices
(kWh, USD)
1๐Ÿ‡ณ๐Ÿ‡ฑ Netherlands$0.41
2๐Ÿ‡ธ๐Ÿ‡ช Sweden$0.24
3๐Ÿ‡ฉ๐Ÿ‡ช Germany$0.21
4๐Ÿ‡ง๐Ÿ‡ท Brazil$0.20
5๐Ÿ‡ฉ๐Ÿ‡ฐ Denmark$0.19
6๐Ÿ‡ช๐Ÿ‡ธ Spain$0.17
7๐Ÿ‡ฎ๐Ÿ‡น Italy$0.16
8๐Ÿ‡ฆ๐Ÿ‡น Austria$0.16
9๐Ÿ‡ธ๐Ÿ‡ฌ Singapore$0.15
10๐Ÿ‡ง๐Ÿ‡ช Belgium$0.15
11๐Ÿ‡ญ๐Ÿ‡ฐ Hong Kong$0.14
12๐Ÿ‡จ๐Ÿ‡ฟ Czech Republic$0.14
13๐Ÿ‡ฌ๐Ÿ‡ท Greece$0.12
14๐Ÿ‡ซ๐Ÿ‡ท France$0.12
15๐Ÿ‡ฏ๐Ÿ‡ต Japan$0.11
16๐Ÿ‡ฌ๐Ÿ‡ง United Kingdom$0.10
17๐Ÿ‡จ๐Ÿ‡ญ Switzerland$0.10
18๐Ÿ‡จ๐Ÿ‡ฑ Chile$0.10
19๐Ÿ‡ต๐Ÿ‡น Portugal$0.09
20๐Ÿ‡ง๐Ÿ‡ง Barbados$0.09
21๐Ÿ‡ต๐Ÿ‡ฑ Poland$0.09
22๐Ÿ‡ง๐Ÿ‡ฌ Bulgaria$0.09
23๐Ÿ‡ฎ๐Ÿ‡ช Ireland$0.08
24๐Ÿ‡ฆ๐Ÿ‡บ Australia$0.07
25๐Ÿ‡ฒ๐Ÿ‡ฝ Mexico$0.07
26๐Ÿ‡ณ๐Ÿ‡ฟ New Zealand$0.06
27๐Ÿ‡ธ๐Ÿ‡ฐ Slovakia$0.06
28๐Ÿ‡บ๐Ÿ‡ฒ U.S.$0.05
29๐Ÿ‡ฐ๐Ÿ‡ท South Korea$0.04
30๐Ÿ‡จ๐Ÿ‡ด Colombia$0.04
31๐Ÿ‡จ๐Ÿ‡ฆ Canada$0.03
32๐Ÿ‡ท๐Ÿ‡ธ Serbia$0.03
33๐Ÿ‡น๐Ÿ‡ผ Taiwan$0.03
34๐Ÿ‡บ๐Ÿ‡ฆ Ukraine$0.03
35๐Ÿ‡ฒ๐Ÿ‡พ Malaysia$0.03
36๐Ÿ‡ญ๐Ÿ‡บ Hungary$0.03
37๐Ÿ‡น๐Ÿ‡ณ Tunisia$0.02
38๐Ÿ‡ฆ๐Ÿ‡ฟ Azerbaijan$0.01
39๐Ÿ‡ง๐Ÿ‡ญ Bahrain$0.01
40๐Ÿ‡ง๐Ÿ‡ฉ Bangladesh$0.01
41๐Ÿ‡น๐Ÿ‡ท Turkey$0.01
42๐Ÿ‡ท๐Ÿ‡บ Russia$0.01
43๐Ÿ‡ฆ๐Ÿ‡ท Argentina$0.01
44๐Ÿ‡ง๐Ÿ‡พ Belarus$0.01
45๐Ÿ‡ฉ๐Ÿ‡ฟ Algeria$0.003
46๐Ÿ‡ฎ๐Ÿ‡ท Iran$0.001

Source: GlobalPetrolPrices.com. As of March 31, 2022. Represents average household prices.

The good news is that the fall season has been relatively warm, which has helped European natural gas demand drop 22% in October compared to last year. This helps reduce the risk of gas shortages transpiring later in the winter.

Outside of Europe, Brazil has the fourth highest natural gas prices globally, despite producing about half domestically. High costs of cooking gas have been especially challenging for low-income families, which became a key political issue in the run-up to the presidential election in October.

Meanwhile, Singapore has the highest natural gas prices in Asia as the majority is imported via tankers or pipelines, leaving the country vulnerable to price shocks.

Increasing Competition

By December, all seaborne crude oil shipments from Russia to Europe will come to a halt, likely pushing up gasoline prices into the winter and 2023.

Concerningly, analysis from the EIA shows that European natural gas storage capacities could sink to 20% by February if Russia completely shuts off its supply and demand is not reduced.

As Europe seeks out alternatives to Russian energy, higher demand could increase global competition for fuel sources, driving up prices for energy in the coming months ahead.

Still, there is some room for optimism: the World Bank projects energy prices will decline 11% in 2023 after the 60% rise seen after the war in Ukraine in 2022.

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Markets in a Minute

What is the Success Rate of Actively Managed Funds?

For actively managed funds, the odds of beating the market over the long run are like finding a needle in a haystack.

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Actively Managed Funds

What is the Success Rate of Actively Managed Funds?

Over a 20-year period, 95% of large-cap actively managed funds have underperformed their benchmark.

The above graphic shows the performance of actively managed funds across a range of fund types, using data from S&P Global via Charlie Bilello.

Missing the Mark: Actively Managed Funds

Several factors present headwinds to actively managed funds.

  • Trading costs: First, fund managers will trade more often than passive funds. These in turn incur costs, impacting returns.
  • Cash holdings: Additionally, many of these funds hold a cash allocation of about 5% or more to capture market opportunities. Unlike active funds, their passive counterparts are often fully invested. Cash holdings can have the opposite effect than intendedโ€”dragging on overall returns.
  • Fees: Active funds can charge up to 1-2% in investment manager fees while funds that tracked an index passively charged just 0.12% on average in 2022. These additional costs add up over time.

Below, we show how active funds increasingly underperform against their benchmark over each time period.

Fund Type1 Year
% Underperformed
5 Year
% Underperformed
10 Year
% Underperformed
20 Year
% Underperformed
All Large-Cap 51879195
All Small-Cap 57718994
Large-Cap Growth 74869698
Large-Cap Value 59698587
Small-Cap Growth 80598597
Small-Cap Value 41819192
Real Estate 88627487

As we can see, 51% of all large-cap active mutual funds underperformed in a one-year period. That compares to 41% of small-cap value funds, which had the best chance of outperforming the benchmark annually. Also, an eye-opening 88% of real estate funds underperformed.

For context, Warren Buffettโ€™s firm Berkshire Hathaway has beat the S&P 500 two-thirds of the time. Even the worldโ€™s top stock pickers have a hard time beating the marketโ€™s returns.

2020 Market Crash: A Case Study

How about active fundsโ€™ performance during a crisis?

While the case for actively managed funds is often stronger during a market downturn, a 2020 study shows how they continued to underperform the index.

Overall, 74% of over 3,600 active funds with $4.9 trillion in assets did worse than the S&P 500 during the 2020 market plunge.

Stage of 2020 CycleTime Period% Underperforming S&P 500
CrisisFeb 20 - Apr 30, 202074.2
CrashFeb 20 - Mar 23, 202063.5
RecoveryMar 24 - Apr 30, 202055.8
Pre-CrisisOct 1 2019 - Jan 31, 202067.1

Source: NBER

In better news, roughly half underperformed through the recovery, the best out of any market condition that was studied.

The Bigger Impact

Of course, some actively managed funds outperform.

Still, choosing the top funds year after year can be challenging. Also note that active fund managers typically only run a portfolio for four and a half years on average before someone new takes over, making it difficult to stick with a star manager for very long.

As lower returns accumulate over time, the impact of investing in active mutual funds can be striking. If an investor had a $100,000 portfolio and paid 2% in costs every year for 25 years, they would lose about $170,000 to fees if it earned 6% annually.

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Ranked: The Largest Bond Markets in the World

The global bond market stands at $133 trillion in value. Here are the major players in bond markets worldwide.

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The Largest Bond Markets in the World

The Largest Bond Markets in the World

In 2022, the global bond market totaled $133 trillion.

As one of the worldโ€™s largest capital markets, debt securities have grown sevenfold over the last 40 years. Fueling this growth are government and corporate debt sales across major economies and emerging markets. Over the last three years, Chinaโ€™s bond market has grown 13% annually.

Based on estimates from the Bank for International Statements, this graphic shows the largest bond markets in the world.

โ„น๏ธ Total debt numbers here include both domestic and international debt securities in each particular country or region. BIS notes that international debt securities are issued outside the local market of the country where the borrower resides and cover eurobonds as well as foreign bonds, but exclude negotiable loans.

Ranked: The World’s Top Bond Markets

Valued at over $51 trillion, the U.S. has the largest bond market globally.

Government bonds made up the majority of its debt market, with over $26 trillion in securities outstanding. In 2022, the Federal government paid $534 billion in interest on this debt.

China is second, at 16% of the global total. Local commercial banks hold the greatest share of its outstanding bonds, while foreign ownership remains fairly low. Foreign interest in Chinaโ€™s bonds slowed in 2022 amid geopolitical tensions in Ukraine and lower yields.

Bond Market RankCountry / RegionTotal Debt OutstandingShare of Total Bond Market
1๐Ÿ‡บ๐Ÿ‡ธ U.S.$51.3T39%
2๐Ÿ‡จ๐Ÿ‡ณ China$20.9T16%
3๐Ÿ‡ฏ๐Ÿ‡ต Japan$11.0T8%
4๐Ÿ‡ซ๐Ÿ‡ท France$4.4T3%
5๐Ÿ‡ฌ๐Ÿ‡ง United Kingdom$4.3T3%
6๐Ÿ‡จ๐Ÿ‡ฆ Canada$4.0T3%
7๐Ÿ‡ฉ๐Ÿ‡ช Germany$3.7T3%
8๐Ÿ‡ฎ๐Ÿ‡น Italy$2.9T2%
9๐Ÿ‡ฐ๐Ÿ‡พ Cayman Islands*$2.7T2%
10๐Ÿ‡ง๐Ÿ‡ท Brazil*$2.4T2%
11๐Ÿ‡ฐ๐Ÿ‡ท South Korea*$2.2T2%
12๐Ÿ‡ฆ๐Ÿ‡บ Australia$2.2T2%
13๐Ÿ‡ณ๐Ÿ‡ฑ Netherlands$1.9T1%
14๐Ÿ‡ช๐Ÿ‡ธ Spain$1.9T1%
15๐Ÿ‡ฎ๐Ÿ‡ณ India*$1.3T1%
16๐Ÿ‡ฎ๐Ÿ‡ช Ireland$1.0T1%
17๐Ÿ‡ฒ๐Ÿ‡ฝ Mexico*$1.0T1%
18๐Ÿ‡ฑ๐Ÿ‡บ Luxembourg$0.9T1%
19๐Ÿ‡ง๐Ÿ‡ช Belgium$0.7T>1%
20๐Ÿ‡ท๐Ÿ‡บ Russia*$0.7T>1%

*Represent countries where total debt securities were not reported by national authorities. These figures are the sum of domestic debt securities reported by national authorities and/or international debt securities compiled by BIS.
Data as of Q3 2022.

As the above table shows, Japan has the third biggest debt market. Japanโ€™s central bank owns a massive share of its government bonds. Central bank ownership hit a record 50% as it tweaked its yield curve control policy that was introduced in 2016. The policy was designed to help boost inflation and prevent interest rates from falling. As inflation began to rise in 2022 and bond investors began selling, it had to increase its yield to spur demand and liquidity. The adjustment sent shockwaves through financial markets.

In Europe, France is home to the largest bond market at $4.4 trillion in total debt, surpassing the United Kingdom by roughly $150 billion.

Banks: A Major Buyer in Bond Markets

Like central banks around the world, commercial banks are key players in bond markets.

In fact, commercial banks are among the top three buyers of U.S. government debt. This is because commercial banks will reinvest client deposits into interest-bearing securities. These often include U.S. Treasuries, which are highly liquid and one of the safest assets globally.

As we can see in the chart below, the banking sector often surpasses an economy’s total GDP.

Banking Sector

As interest rates have risen sharply since 2022, the price of bonds has been pushed down, given their inverse relationship. This has raised questions about what type of bonds banks hold.

In the U.S., commercial banks hold $4.2 trillion in Treasury bonds and other government securities. For large U.S. banks, these holdings account for almost 24% of assets on average. They make up an average 15% of assets for small banks in 2023. Since mid-2022, small banks have reduced their bond holdings due to interest rate increases.

As higher rates reverberate across the banking system and wider economy, it may expose further strains on global bond markets which have expanded rapidly in an era of dovish monetary policy and ultra-low interest rates.

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