Does long manager tenure equal outperformance?
There are six Australian equity fund managers who have worked on their funds for more than 20 years, according to data.
According to FE Analytics data, within the Australian Core Strategies universe, there were 292 funds in the Australian equity sector.
The longest-serving managers were Paul Xiradis on the Ausbil Australian Active Equity fund and Mark Arnold on the Hyperion Australian Growth Companies who had both worked on their funds for 22 years.
Meanwhile, Anton Tagliaferro had worked on the IML Australian Share fund at IML for 21 years as had Matthew Lambert on the Legg Mason Martin Currie Sustainable Equity fund. Lastly, Andrew Waddington had managed the Pendal Imputation fund and John Murray had managed the Perennial Value Australian Shares Trust for 20 years.
Looking at whether this consistency had contributed to performance, the best-performing fund over the past 20 years to 30 April was IML Australian Share which returned 434% followed by Ausbil which returned 422%.
All of the six funds had returned more than the Australian equity sector average which was a return of 282%.
However, a long track record and experience did not necessarily help funds to navigate turbulent markets with only the Hyperion Australian Growth Companies fund beating the Australian equity sector average since the start of the year.
The Hyperion fund lost 1.8% since the start of year to 19 May 2020 compared to losses of 16% by the sector while the other five funds all also reported losses with the worst being Perennial Value Australian Shares Trust which lost 22%.
In its factsheet, Hyperion said its top holdings included CSL, Dominos Pizza, Resmed, Cochlear and REA Group.
“The fund considerably outperformed the benchmark, largely due to the changes that have strategically been made to our strategies over the last 24 months,” it said.
“Increasing cash levels to double-digit rates, removing cyclical positions and increasing the weights of businesses with robust business models that have strong value propositions and low or modest levels of financial gearing attributed to our results.”
AUTHOR
Laura Dew
Recommended for you
Bennelong Funds Management chief executive John Burke has told Money Management that the firm is seeking to invest in boutiques in two specific asset classes as it identifies gaps in its product range.
Responsible investment performance concerns have lessened as the market hits $1.6 trillion in AUM, according to RIAA’s annual report, but greenwashing fears among asset managers are on the rise.
Research by Morningstar has found fixed income funds are bucking a general trend around managed fund fee dispersion with a smaller fee dispersion compared to equity ones.
As investors seek to diversify their portfolios, the naming of bond labels has broadened out to include green, social and impact bonds, according to the annual RIAA report.
