Active managers struggling to beat the index
Active managers across a range of sharemarket categories failed to beat their respective indexes in the volatile September quarter, according to Morningstar’s latest managed funds report.
Morningstar senior research analyst Julian Robertson said reading the market proved difficult for most Australian large-cap managers over the third quarter, with the majority failing to deliver. Only 26 out of the 102 large cap funds in Morningstar’s league tables performed as well or better than the index.
Of the small cap funds surveyed, only nine active managers out of 40 beat the index over the September quarter.
The trend continued where global share funds were concerned, with only 16 of the 72 funds managing to negate the effects of the rapidly rising Australian dollar to post positive returns — although 43 out of 72 funds did outperform the index.
Australian listed property managers all delivered positive returns for the quarter, but less than half the sample (15 out of 34) beat the S&P/ASX300 A-REIT Accumulation Index.
Meanwhile, only five of 26 global property managers beat their relevant index, and those that did beat it did so on a “fairly narrow margin”, Robertson said.
Robertson said sharemarket conditions remained difficult for investors.
“Currency has had a significant effect on returns this past quarter, and it could be that currency issues continue to exert a major influence on investment markets and economies going forward. Currency devaluation is a key weapon in a country’s arsenal when attempting to stimulate economic activity — and a number of countries are still desperately in need of this,” Robertson said.
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