Fund managers come up trumps over market

Fund managers finally delivered in the year to June 30, outperforming a buoyant market by 2.8 per cent, a report by Mercer has found.

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.