Stock picking takes precedence over style

Fund manager investment style was irrelevant as individual manager stock-picking strategies resulted in many benefiting from the continued resurgence of the domestic equity market in July, according toInTech.

Value and growth styles did not impact the relative performance of the managers, with a mixture of both styles at the top and bottom of the survey results, says InTech Portfolio Manager Chris Thompson.

“In the current environment stock-picking is likely to be the dominant determinant of returns although other factors such as market capitalisation biases will become more important,” Thompson says.

The results, ending July 31, show the recovery of both local and international share markets on the back of strengthening global economic fundamentals, with the domestic market posting its longest consecutive positive run since January 1999.

The median manager outperformed the index by 0.1 per cent over the period, with the top performers for the month beingPerennialGrowth (5.6 per cent),Portfolio Partners(5.3 per cent) andTyndallValue (5.2 per cent).

While for the 12 months ending July 31, Tyndall Value (13.1 per cent),Lazard(11.7 per cent) and Perennial Value (11.2 per cent) were the best performing managers.

July also saw investors moving out of defensive sectors into cyclical ones, in addition to the “a mixed bag” of manager performance across both growth and value styles.

July was a strong month for international shares, with the median manager returning 5.17 per cent, while Australian bond yields also rose sharply during the month after having record lows in mid-June.