Shares record best quarter for a decade

The good times appear to be rolling again for Australian and international share managers according to the latest data released byInTech Financial Services.

The survey data shows that the 9.5 per cent financial year to date return recorded by the Australian share market was the strongest July to October return recorded since 1993-94, while the 9.4 per cent return recorded by international equities is the strongest July to October result since 1984-85.

InTech senior consultant Andrew Korbel says share managers are benefiting from a blistering recent performance by both domestic and international share markets.

“We have not seen shares product returns like these, at this time of year, for more than a decade,” he says.

“The recent performance would be a welcome result for share investors who have been beleaguered with bad news for a number of years and it highlights that share investing is about the long term,” Korbel says.

He says it also demonstrates that while an average annual return of 7-10 per cent can reasonably be expected over the long term, year to year variability in returns can be huge at times.

Korbel says that over the past five years, the Australian share market returned 8.2 per cent a year - a result consistent with long-term expectations.

“However the profile of individual year returns over this five year period has been 12 per cent, -3 per cent, 3 per cent, 17 per cent and 13 per cent with each year markedly different from the five year average,” he says.

Looking at performances during October, the InTech data says Australian shares returned 3.3 per cent over the month, bouncing back from a flat performance in September and resulting in Australian shares being the best performed asset class this financial year.

It says the median active Australian shares manager returned 3.5 per cent for the month, marginally out-performing theS&P/ASX200 Index by 0.2 per cent with the top performers beingPM Capital(6.9 per cent), Dimensional (5.6 per cent) andPortfolio Partners(4.3 per cent).