Australian funds failing to meet benchmarks
Only 6.5 per cent of Australian funds consistently beat their benchmarks consecutively over three years, according to S&P Dow Jones.
The index provider found there were relatively few funds in the ACS universe which managed to stay at the top for consecutive years.
This percentage fell further when the funds were considered over a five-year period, dropping to 1.3 per cent.
The Australian Equity A-REIT sector was the most consistent with 15.8 per cent of funds in that sector outperforming over three consecutive years. However, there were zero sectors which showed high persistence in their outperforming funds over five consecutive years.
When the research examined only funds in the top quartile, it found 9.7 per cent, some 19 funds in the investment universe, maintained their top quartile rankings over three years and 2.2 per cent over five years.
Most consistent for top quartile funds was Australian Bonds with half of its top quartile funds remaining top quartile over three years while International Equity General was worst with only 1.7 per cent of funds remaining top quartile.
The report concluded: “While comparing returns against a benchmark is a common practice to evaluate the performance of active funds, performance persistence is an additional test of the fund managers’ skills at overcoming different market environments.”
AUTHOR
Laura Dew
Recommended for you
RQI Investors, an active quantitative equities manager within First Sentier Investors Group, has bolstered its research team with two appointments.
Following the announcement last week that Selfwealth had formally commenced into a scheme of arrangement with Bell Financial Group, Svava has put forward a binding proposal to acquire the trading platform.
Perpetual has made a major announcement about its deal with KKR after an independent expert ruled it would not be in the best interest of shareholders.
According to Magellan, departing head of investment, Gerald Stack, has enacted a “textbook succession plan” which has helped reduce forecasted outflows from his infrastructure division.
