Share funds take stock of tough market conditions

The median local share fund gained 12 per cent in the past financial year, largely tracking the 11.9 per cent gain recorded by the broader S&P/ASX 300 index, according to figures complied by Mercer.

Investment management performance is critical for the allocation of tens of billions of dollars in retirements savings by the nation's superannuation funds.

Fund managers that looked for value across individual stocks were among those that substantially outperformed the market and were able to hold on to gains.

BlackRock's long-short fund was the best performer out of more than 130 funds tracked by Mercer, returning 29.4 per cent over the year. As the name suggests, long-short funds both buy and short-sell stocks in their portfolios.

Of the more conventional long-only funds, newcomer Continuum Capital Management came out on top with a 25.7 per cent return.

Continuum's Brett McElwee said the strong return was achieved by reacting quickly to market trends, switching between sectors frequently although in a disciplined way.

"What we do is not try to pick the next dip or rally in the market," Mr McElwee said.

"Our approach is to detect changes in the market and be as responsive as we can be to those changes."

In January, stockbrokers were tipping the benchmark S&P/ASX 200 index to finish the calendar year in the mid-5000s.

But recent forecasts are deliberating whether the 5000-point barrier can be breached, with the market falling around 10 per cent since April, haunted by persistent debt fears in the US and Europe, growth concerns in China and weak consumer confidence domestically.