Conservative investors bring home the bacon in 2000

Conservative investors may end up with the bigger returns for 2000 as conservative asset classes such as bonds outperformed growth assets such as shares.

Australian bonds were not only a safe bet in 2000, but exceeded all expectations on their performance, according to figures just released by Intech Financial Services.

Bonds finished the year with an average performance of 12.1 per cent last year compared to its five year average of 8.8 per cent.

Individually, the best performing Australian bond managers were Colonial First State and SMF which both drew returns of more than 13 per cent.

Additionally to outperforming their own benchmarks, Australian bonds surpassed the traditionally stronger asset classes of Australian and International shares, which both registered single figure returns for the year.

Australian share funds could only manage an average return of just over 8 per cent while international share funds were comparatively dismal in 2000, with returns of about 5 per cent.

But hidden in the apparent woes of international shares is some consolation that active management outperformed the indexed results by about 3 per cent.

The returns in international shares varied wildly from manager to manager in 2000. Some of the better managed funds were able to scale over the 20 per cent mark, such as Bernstein, Oppenheimer, Standish and Rothschild Putnam Value.

But while most funds had more modest single figure profits, there were a number of funds with negative returns. Interestingly, the fund with the worst yearly performance for 2000 came from the same house with one of the best performers: Rothschild Putnam Growth fund made a loss of more than 17 per cent.