AUSTRALIAN superannuation fund trustees may be generally more comfortable using large managers with a strong brand name to manage their fund’s investments, but it appears they have lost out financially by adopting such a strategy.
This was one of the findings of the InTech June 2002 survey of specialist Australian shares managers.
The InTech Australian Shares (Specialist) Survey released this week indicates that the median Australian shares manager lost 4.2 per cent over the 2001-02 financial year, marginally ahead of the benchmark S&P/ASX 200 Accumulation Index, which fell 4.7 per cent.
Value-orientated managers recorded a positive return of 4.1 per cent, while growth-orientated managers were down 12.1 per cent.
The best performers over the year were mainly value managers, including Tyndall, Lazard, Dimensional, Perennial Value, Investors Mutual, Constellation, Perpetual and Maple-Brown Abbott.
At the other end of the table, the worst performers were JFCP, Credit Suisse, Alliance Capital, Deutsche and Merrill Lynch.
InTech chief investment officer Ron Liling said the strength of the smaller specialist managers was their flexibility.
“The internal processes of the ‘bigger’ managers tend to be more cumbersome and bureaucratic, which might help explain the performance differentials observed in the survey,” he said.
ASFA CEO Philippa Smith advised investors to stick it out and not panic during the downturn, as the long-term average returns still remained higher than with other investment options.
“There have been 15 years of good news; now we have to take the rough with the smooth,” she said.
“This is not something that only affects super, everyone else who has been exposed to the share market has suffered too, from individuals to large institutional investors.
“If you opted to invest only in cash over the last 10 years you would now be about 20 per cent worse off than somebody who was in a balanced fund (with exposure to shares, property, cash and bonds) even taking into account the current equity market downturn.”