Bond funds demonstrating consistent top-quartile performance

S&P/S&P-Dow-Jones-Indices/active-management/bonds/fixed-income/

8 May 2024
| By Laura Dew |
image
image image
expand image

An Australian bond fund is the only Australian fund to retain top-quartile performance in their sector over five years, according to S&P Dow Jones research. 

The research firm’s Persistence Scorecard measures the consistency of a fund’s relative performance over five years to 31 December 2023.

Some 44 per cent of the 16 top quartile bond funds in 2021 remained in the top quartile for the next two years compared to just 2 per cent of top quartile equity funds and zero Australian A-REIT funds.

Looking over five years, 5.8 per cent of the funds in the top quartile in 2019 had managed to remain in the top quartile in 2023, representing just one fund.

This was the only fund in the Australian investment universe across all sectors covered by the research to achieve this consistent top-quartile performance.

S&P said this was helped by the majority of active bond managers outperforming their benchmark in 2023 in contrast to a challenging time for equity managers.

“2023 was a challenging environment for active equity managers in Australia and persistence of outperformance was hard to find, largely in line with the results of prior years.

“In comparison to equity managers, there was a higher degree of persistence in the outperformance of bond managers versus peers as well as benchmarks; however more results will need to be seen consistently over longer time periods to conclude the existence of genuine skill among bond managers.”

Looking at their alpha persistence over three consecutive 12-month periods, 45 per cent of Australian bond funds had outperformed their benchmark in December 2021 and 41 per cent of these had continued to outperform in December 2023.

On the other hand, 59 per cent of Australian equity funds had outperformed in December 2021 but the percentage that had continued to outperform in December 2023 fell dramatically to just 2 per cent.  

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

So we are now underwriting criminal scams?...

2 months 2 weeks ago

Glad to see the back of you Steve. You made financial more expensive, not more affordable as you claim, and presided ...

2 months 3 weeks ago

Completely agree Peter. The definition of 'significant change is circumstances relevant to the scope of the advice' is s...

4 months 3 weeks ago

ASIC has suspended the Australian Financial Services Licence of a Melbourne-based financial advice firm....

6 days 20 hours ago

The corporate regulator has issued infringement notices to three AFSLs whose financial advisers provided personal advice to a retail client while unregistered....

1 week 5 days ago

ASIC has released the results of its first adviser exam to be held in 2025, with 241 candidates attempting the test....

2 weeks 3 days ago

TOP PERFORMING FUNDS

ACS FIXED INT - AUSTRALIA/GLOBAL BOND