Australian funds failing to meet benchmarks
Only 6.5 per cent of Australian funds consistently beat their benchmarks consecutively over three years, according to S&P Dow Jones.
The index provider found there were relatively few funds in the ACS universe which managed to stay at the top for consecutive years.
This percentage fell further when the funds were considered over a five-year period, dropping to 1.3 per cent.
The Australian Equity A-REIT sector was the most consistent with 15.8 per cent of funds in that sector outperforming over three consecutive years. However, there were zero sectors which showed high persistence in their outperforming funds over five consecutive years.
When the research examined only funds in the top quartile, it found 9.7 per cent, some 19 funds in the investment universe, maintained their top quartile rankings over three years and 2.2 per cent over five years.
Most consistent for top quartile funds was Australian Bonds with half of its top quartile funds remaining top quartile over three years while International Equity General was worst with only 1.7 per cent of funds remaining top quartile.
The report concluded: “While comparing returns against a benchmark is a common practice to evaluate the performance of active funds, performance persistence is an additional test of the fund managers’ skills at overcoming different market environments.”
AUTHOR
Laura Dew
Recommended for you
Six months after scrapping its planned deal with KKR, Perpetual is yet to make significant headway on the sale of its wealth management division but is focusing on alternatives for product development.
Platinum Asset Management’s NPAT has fallen by 89 per cent in FY25, with the firm confirming that it will be renamed as L1 Group following the expected completion of its merger with L1 Capital.
Bell Financial Group co-chief executive, Arnie Selvarajah, believes regulation will make the provision of episodic advice easier for consumers and is pivoting the business over the next two years to focus on wealth management.
Statutory NPAT at Pacific Current has almost halved in FY25 to $58.2 million as the result of an investment restructure.
