Conservative investors hurt by rebound
Investors who lost their nerve and switched from equities to cash back in March have missed out on an equity market spike, leaving them 20 per cent worse off.
A report on the third quarter of 2003 fromRussell Investment Groupsays this was a classic period when investors who “kept the faith” and remained fully invested were rewarded.
The group says this was due to a continued equity market rally over the period, which climbed 6 per cent over the quarter, to leave the market up 20.5 per cent from its low point on March 13 this year.
Russell says AMP’s share price rise, the lacklustre performance of property trusts and the strength of the small caps sector influenced the performance of investment managers.
Group research analyst Ian Lundy says that a large upward movement in the AMP stock price had a significant bearing on the performance of managers with many having a strong bias towards it.
“There was certainly an element of luck involved in managers’ positioning in AMP as uncertainty was high,” Lundy says.
Property trusts performed relatively poorly over the period, and outperformed by the broader market by 10 per cent given their own decline of 3.5 per cent.
In contrast small companies returned 15.3 per cent over the quarter, outperforming the market by 9 per cent, partially driven by gold stocks, according to Russell.
Lundy says there was also no clear value or growth bias over the quarter differentiating managers.
Recommended for you
While M&A has ramped up nationwide, three advice heads have explored Western Australia’s emergence as a region of interest among medium-sized firms vying for growth opportunities in an increasingly competitive market.
The Australian Financial Complaints Authority has reported an 18 per cent increase in investment and advice complaints received in the financial year 2025, rebounding from the previous year’s 26 per cent dip.
EY has broken down which uses of artificial intelligence are presenting the most benefits for wealth managers as well as whether it will impact employee headcounts.
Advice licensee Sequoia Financial Group has promoted Sophie Chen as an executive director, following her work on the firm’s Asia Pacific strategy.
