Active managers struggling says SSgA
As Australian superannuation fund trustees look for ways of extracting even better returns for members, State Street Global Advisors (SSgA) has issued a sobering assessment of investment managers who pursue overly-aggressive strategies.
SSgA this week released new research which it said showed that the majority of active Australian equity managers struggled to produce persistently above benchmark returns after fees.
It said this was reinforcing the trend for investors to use cheaper passive strategies to gain a “core” exposure to equity markets.
The SSgA Manager Persistence Survey, released in Australia on Monday, looked at the performance of Australian equity managers, international equity managers and listed property trusts for the period from June 30, 1991, to June 30, this year, and found that overall, few managers had outperformed the threshold.
Commenting on the survey outcome, SSgA’s head of structure products in Australia Susan Darroch said the results showed that investors needed to be aware of their active managers’ ability to outperform because many did not beat the adjusted threshold with any measure of persistence.
She said the results showed that the performance threshold suggested for some investors paying the top margin tax rate had a significant impact on the attractiveness of active management.
Darroch said the findings also supported the view that a low-cost passive or enhanced exposure to the market, combined with more aggressive active satellite ‘bets’ could produce better returns at lower risk and lower cost.
Recommended for you
The FSCP has announced its latest verdict, suspending an adviser’s registration for failing to comply with his obligations when providing advice to three clients.
Having sold Madison to Infocus earlier this year, Clime has now set up a new financial advice licensee with eight advisers.
With licensees such as Insignia looking to AI for advice efficiencies, they are being urged to write clear AI policies as soon as possible to prevent a “Wild West” of providers being used by their practices.
Iress has revealed the number of clients per adviser that top advice firms serve, as well as how many client meetings they conduct each week.
