Aussie active managers underperform

Rainmaker research revealed that over the three years to June 2019 the median managers in all active investment categories underperformed their respective benchmark returns.

The research looked at active core, high performance and small companies funds.

Active core is defined as products with an investment objective of outperforming the benchmark with a moderate active risk level and high performance is defined as products with high levels of active risk against the asset class benchmark.

Over the three years, the benchmark indexes were 12.9% pa from the S&P ASX 200 Index and 10.7% pa from the S&P ASX Small Ordinaries Index

The research found that the among active core products the median return was 12.6% per annum, the mean return was 11.9% and the asset-weighted return was 11.7%.

Only two in five active core products outperformed the benchmark.

High performance products had a median return of 9.6% pa, a mean return of 10.1% and an asset-weighted return of 10.0%.

Only one in five high performance products outperformed the benchmark.

However, three quarters of products had a minimum monthly return over the three years that was higher than the benchmark monthly minimum.

When it comes to risk, in active core products 60% had higher volatility than the benchmark and in high performance 85% did.

Top active core products for risk/return included the Macquarie Australian Shares Fund with a 16.6% pa return.

In active core, the median manager would have outperformed if not for management fees.

In high performance, the Selector Australian Equities Fund topped the list with a 17.5% pa return. The Lazard Select Australian Equity Fund was further down the list for pure returns with 11.7% but came second for risk/return ratio.

The SGH Emerging Companies Fund was found to have the highest risk/return metrics based on Rainmaker research, it returned 17.1% pa.

Read more: RainmakerCompanies FundLazard Select Australian Equity FundMacquarie Australian Shares FundSelector Australian Equities Fund
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