Less than one in five managers in the black

With only five growth-oriented investment managers ending the financial year in positive territory, the median likewise focused superannuation fund has returned -2 per cent for the year ending June 30, according to figures released byInTech Researchtoday.

The five managers out of a total of 29 making it into positive territory wereBarclays Global Investors(BGI) (3.3 per cent),Suncorp(1.2 per cent), United (0.3 per cent),CitigroupBalanced (0.2 per cent) andTyndall(0.1).

According to InTech, BGI benefited from increasing its exposure to international shares after February taking advantage of the market turnaround reversal, in addition to benefiting from hedging some of its exposure to international shares and protecting it from the Australian dollar rising.

Suncorp also performed strongly due to asset allocation decision making. It had an overweight exposure to bonds and listed property trusts, as overweighting Australian equities in the first half of 2003 and hedging some foreign currency exposure back into the Australian dollar.

According to InTech executive director Brett Elvish, despite the overall disappointing results for growth-oriented managers over the last two years, long term returns for superannuation funds remain strong.

“The median super fund has returned 7.4 per cent over the past 10 years, delivering a real return of 4.8 per cent after inflation and is consistent with our long term expectations for superannuation investments,” he says.

Elvish also moved to reassure investors who may be despondent about the performance of their investment manager.

“No one manager performs well across all stages of the market cycle. Therefore shorter term poor performance due to asset allocation does not mean that a fund is not well positioned to deliver long-term performance outcomes. You need to get beneath the headline number to assess the quality of your investment manager,” he says.