Fund managers come up trumps over market
The average Australian share fund manager returned 24.7 per cent in the 2013 financial year, the report found, outperforming the 21.9 per cent return of the S&P/ASX 300 Index.
Mercer principal David Carruthers said the overall return was "a pretty impressive performance in a strong market".
"That's the best performance managers have had since 2009," he said.
He said normally managers should return a bit more than the market, to compensate for their fees.
The Australian sharemarket was pushed higher in the year to June 30 by huge gains in healthcare stocks and banks, but small caps, particularly resource companies, felt the pain.
"The mining boom has slowed down and affected the smaller resource companies," Mr Carruthers said.
Income-oriented managers outperformed over the year, up 28.5 per cent. At the other end of the scale, the average absolute return manager returned just 14.3 per cent.
The top five Australian share managers for the year were Lazard Select Australian Equity (returning 41.8 per cent), Perpetual Wholesale Ethical (37.4 per cent), Perpetual Wholesale SHARE-PLUS (37.4 per cent), Lazard Australian Equity (37.1 per cent) and Bennelong Concentrated (35.9 per cent).
The bottom-five performing Australian share managers for 2013 were Independent Asset Management (up 2.8 per cent), Katana (6.5 per cent), SGH20 (9.5 per cent), Northward Capital Australian Equity Income (11.8 per cent), and Clime Australian Value Fund (12.9 per cent).
Over three years, the best annual returns were from income-oriented managers, at 12.1 per cent.
Frequently Asked Questions about this Article…
Yes. A Mercer report found the average Australian share fund manager returned 24.7% in the year to June 30, 2013, outperforming the S&P/ASX 300 Index return of 21.9% by 2.8 percentage points.
The top five Australian share managers for the 2013 financial year were Lazard Select Australian Equity (41.8%), Perpetual Wholesale Ethical (37.4%), Perpetual Wholesale SHARE-PLUS (37.4%), Lazard Australian Equity (37.1%) and Bennelong Concentrated (35.9%).
According to Mercer, the bottom five performing Australian share managers for 2013 were Independent Asset Management (up 2.8%), Katana (6.5%), SGH20 (9.5%), Northward Capital Australian Equity Income (11.8%) and Clime Australian Value Fund (12.9%).
Income-oriented managers performed best over the year, returning 28.5%. For everyday investors, that highlights how different management styles (like income-focused strategies) can materially affect returns depending on market conditions.
Income-oriented managers returned 28.5% for the year, while the average absolute return manager returned 14.3%. Over three years, income-oriented managers also produced the best annual returns at 12.1% per year, per the Mercer report.
The market was pushed higher by large gains in healthcare stocks and banks, while small caps—especially resource companies—were hit as the mining boom slowed, according to Mercer principal David Carruthers.
Mercer’s report notes managers normally should return a bit more than the market to compensate for their fees. In 2013 managers did outperform the S&P/ASX 300 by about 2.8 percentage points, which helps cover fees and justify active management for some investors.
Key takeaways: active managers outperformed the market overall in 2013, manager style matters (income-oriented managers led returns), sector drivers like healthcare and banks can lift returns, and investors should consider manager track record and fees when choosing funds.
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