Managed funds ‘go to the ropes’ but still fighting

Australian managed funds experienced outflows of more than 10 per cent over the past financial year as investors took flight to bonds, cash and property in what was another year of high market volatility, research groupDexx&rrevealed yesterday.

Overall assets held by managed funds fell to $34 billion for the year ending June 31, after suffering outflows of $3.6 billion.

However Dexx&r senior analyst Scott Sunderland says the degree of outflows would have been worse, but the stronger performance by managed funds, as with Australian share funds, over the past three months has led to funds flowing back into these sectors.

The survey of 72 managed funds found the average return for the three months to the end of the financial year was 4.5 per cent, however despite this stellar late surge it wasn’t enough to push the average return for the year into positive territory, with the average fund returning -1.6 per cent over the 12 months.

Meanwhile, and despite disappointing returns over the last two years,InTech Researchsays that over the long-term the median manager in its growth fund survey has continued to deliver on their objective of outperforming the consumer price index (CPI) by more than 2 to 4 per cent per annum.

As a result InTech urges investors to maintain their long-term investment strategies and not to be swayed by short-term market volatility.

“While we are investing in a low return environment, maintenance of their long-term investment strategy will ultimately decide the level of their retirement savings,” InTech says.