Active market portfolios outperform benchmarks
Advisers are opting for the perceived safety of index managers as less than half of all fund managers beat their respective benchmarks, according to Watershed Group.
The funds management and dealer services group said in light of the low cost index hugging view its active equity managers continued to generate performance above their respective benchmarks.
Watershed's director, Adam Rowley, said "advisers with strong or active market views, aligned with professional investment managers and managed discretionary accounts (MDA) capability, have the tools required to deliver long-term outperformance for their clients."
The firm's standout performer was its emerging leaders portfolio that outperformed the ASX Small Ordinaries Accumulation Index by 13.31 per cent with a return of 13.75 per cent over the year to June 2015.
Although the portfolio fell accordingly with the index at the end of the June quarter its overweight position in cash helped its performance.
Watershed's core share portfolio beat the S&P/ASX200 Accum Index by 4.24 per cent with a return of 9.92 per cent, almost double the index return thanks to its large cash position as the market fell in April and May.
The firm's international share portfolio also beat its index by three per cent with a return of 14.7 per cent.
The only portfolio to underperform its one year benchmark at 2.59 per cent was its income portfolio with a return of 0.01 per cent. However, its long-term investment objectives over two, three, and four years all beat its UBS Bank Bill Index.
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