Median returns outperform index in major asset classes

Investment strategies enacted by institutional investment managers have posted strong results for the 2013-14 financial year with a number of asset classes outperforming the index according to a Morningstar sector survey. 

In its Institutional Sector Survey for the previous financial year Morningstar stated that the median Australian share fund manager returned 18 per cent, outperforming the index by a margin of 0.8 per cent with Allan Gray returning 25.7 per cent, Millinium returning 25.4 per cent and Dalton Nicol Reid returning 24.6 per cent ranking as the three best performers in the sector. 

Longer-term annualised returns for Australian share managers were lower at 11.3 per cent over three years and 11.8 per cent over five years.  

Median international equity managers also posted a return 0.8 per cent above the index at 21.2 per cent for the financial year, and at 17.1 per cent over three years falling to 12.2 per cent over five years. Leading managers who performed around 4 per cent higher than the index were GMO returning 24.5 per cent, Platinum returning 23.9 per cent, and AXA returning 23.7 per cent for the past financial year. 

Australian Real Estate Investment Trust also performed well, at 0.6 per cent above the index at 11.7 per cent with SGH (14.7 per cent), Challenger (14.4 per cent), and Ibbotson (14.2 per cent) leading performers in the sector. 

Morningstar said across the last 12 months growth assets produced strong results with international shares recording 20.4 per cent, Australian shares 17.2 per cent, international property 15.8 per cent and Australian property generated 11.1 per cent. 

However for the month of June value-style Australian shares outperformed growth-style shares with the S&P Australia BMI Value Index returning -10.8 per cent compared to the S&P Australia BMI Growth Index’s -20.6 per cent. The margin between the two styles over the year remained close with growth-style equities returning  17.8 per cent while Value-style equities returned 17.0 per cent.