Managed funds swim in red ink

THE positive returns achieved by most listed investment companies last financial year (see main article) has not been matched by managed equity funds.

The Intech Australian Shares (Specialist) Survey found that the median Australian shares manager lost 4.2 per cent last financial year.

Research group ASSIRT has confirmed the poor results. ASSIRT compiled the returns of 80 diversified shares funds and found that only nine produced positive returns last financial year.

And of the nine, only two funds achieved returns higher than 3 per cent.

The two notable exceptions were

funds managed by Tyndall, which has a ‘deep value’ style. Both Tyndall funds returned about 16 per cent.

The 71 funds that ended the year in the red included all the industry heavyweights, such as Colonial First State’s dividend imputation fund, BT’s Australian shares fund and Merrill Lynch’s imputation fund.

The Colonial First State fund, which holds $3.7 billion of investors’ money, posted a negative return of 6.85 per cent last financial year.

But a long-term view of the market helps to explain why the Colonial First State fund has attracted such strong support.

Over the five years to June 2002, it returned 11.2 per cent per annum, higher than all but a handful of funds in the survey.

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