Active funds underperform: Stockspot
The great debate between active versus passive funds had strengthened, as 77 per cent of Australian active managed funds had underperformed against the index, over a five-year period.
Such was the opinion of Stockspot founder and chief executive, Chris Brycki, who added that even in the United States, 88 per cent of managed funds had underperformed.
It was a poor consistent trend that would continue this year, so advisers needed to do their homework, he said.
"There are so many fund managers competing. It's a difficult equation. Over the last 20 years, the amount of fund managers had doubled, but that doesn't mean that those fund managers can double the market," he said.
The issue was that the fund manager market was saturated.
"They can't [all] beat each other, [possibly why] there had been a lot of money going out of the active market and into exchange traded funds (ETFs)," he said.
"If we put our client's money in active funds, we would be actively losing money for them," he said.
Interestingly, those active funds managers who also recently did well, tended to do poorly going forward, another reason why it was difficult to pick an active fund manager, he said.
Recommended for you
Platinum Asset Management has put its two closed-end funds under strategic review in a bid to reduce the share price discount to pre-tax NTA and maximise shareholder value.
In the latest Meet the Manager profile, Money Management speaks with Michael Skinner, founder and managing director at Blackwattle Investment Partners.
Perpetual has seen AUM rise 6 per cent in the last quarter but the departure of a longstanding JOHCM fund manager led to outflows of $2.2 billion from his strategy.
Global fixed income fund Bentham Global Opportunities has been added to several major platforms, enabling it to be accessed more easily by financial advisers.
