Investors continue 'flight to quality'
Growth funds were down over the second quarter of 2012 while income-focused options fared better in a market where investors sought more defensive funds, according to Morningstar's latest managed fund performance report.
Taking the brunt off market declines, small-cap Australian funds lost 10.02 per cent as a result of 'risk off' trade during the period, with small-cap resources stocks losing 26 per cent.
Large-cap Australian share funds lost 5.75 per cent on average in the June 2012 quarter, with growth funds faring the worst.
This was largely due to the fact that growth-style funds tend to favour resources, which were particularly hard hit over the quarter.
International share funds were also down over the quarter (5.02 per cent) as result of global sharemarket woes, although defensive positioning managed to perform better.
Listed property and bond funds were the stronger performers over the June quarter, with the average Australian listed property fund generating an 8.36 per cent return and the average global property fund increasing 3.05 per cent.
"Nearly all bond funds had a strong quarter as investors' flight to quality pushed high-quality bond yields down around the globe, but funds with the most interest rate exposure fared best," the report stated.
The average Australian bond fund rose 4.21 per cent, outperforming the international category which managed to gain 2.45 per cent.
Alternatives funds presented a mixed bag of return performance over the three months to 30 June, with the average fund down 2.33 per cent. This indicated that most vehicles in the category failed to offer a safe haven from market turbulence, according to Morningstar.
Recommended for you
Schroders has appointed a new chief executive as Simon Doyle steps down from the asset manager after 22 years.
Distribution of private credit funds through advised channels to retail investors will be an ASIC priority for 2026 as it releases the results of its thematic fund surveillance and guidance for research houses.
State Street Investment Management has taken a minority stake in private market secondaries manager Coller Capital with the pair set to collaborate on broaden each firm’s reach and drive innovation.
BlackRock Australia plans to launch a Bitcoin ETF later this month, wrapping the firm’s US-listed version which is US$85 billion in size.
