Choice of manager could soften the blow

Whileinternational managers may have performed poorly over the past three years, the choice of managers could have reduced some of the losses, according toMercer Investment Consulting.

In its latest survey, Mercer says that while the average overseas shares manager has produced —16 per cent per annum for the three years to March 2003, the difference between a good overseas shares manager and a bad one is 8.2 per cent per year.

Mercer principal David Carruthers says the difference between a good and bad Australian shares manager is a smaller 4.2 per cent.

SagittaRothschild Putnam Value over the three years to March 2003 returned —10.9 per cent per year, placing it 13th out of 49 funds.

Meanwhile,Colonial First StateWholesale Shares returned —15.9 per cent per year, placing it 24th.

But after taking into account that Sagitta is a value overseas shares manager and Colonial is a growth manager the story is somewhat different, says Carruthers.

Sagitta actually under-performed the Citigroup Value index by 0.3 per cent each year, making it the worst performing value manager, while Colonial outperformed the Citigroup Growth index by 8.7 per cent each year, making it the best performing growth manager.

Carruthers says the value/growth divide has narrowed.