Super managers post best results for a decade

A buoyant Australian equity market helped fund managers to their best returns in over a decade last year.

The median return of Mercer Investment Consulting’s Pooled Fund Survey - which measures the performance of pooled trusts established by managers for superannuation clients - was 16.1 per cent net of tax and fees for calendar year 2004, a standout result in a five year period where the survey’s median return has been just 5.3 per cent.

Every major asset class finished in positive territory for 2004, a result not seen since 2000, but Australian equities was emphatically the place to be, posting 27.9 per cent for the year, with its listed property sub-set doing even better with 32.2 per cent.

Overseas shares came back into the black to be the third-best asset class, with 9.9 per cent, but the strong Australian dollar meant a fully hedged exposure would have delivered 15.2 per cent.

By far the best performing fund was Invesco’s Wholesale Growth Pooled Superannuation Trust (PST), returning 22 per cent to investors, followed by Perpetual’s Balanced Growth PST with 19 per cent.

There was no one obvious reason for Invesco’s big margin of outperformance, according to Mercer consultant David Carruthers.

“It’s pooled fund has a 40 per cent exposure to Aussie equities, only slightly above the 37-38 per cent average, and Invesco came seventh in Australian equities over the year,” Carruthers said.

“It was more a case of the right asset allocations and solid stock picking across the board.”

Over the five years to December 31, 2004, Maple-Brown Abbott’s PST has retained its strong lead of the survey. The value manager’s 8.4 per cent result was 1.7 per cent clear of the nearest challenger, the Premier Growth fund of fellow value house Tyndall.