Value managers lead pack
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Tuesday, 15 January, 2002 - 21:00
‘VALUE’ managers, led by Maple-Brown Abbott, have become the star performers in the investment management industry.
InTech Financial Services’ latest survey of 35 investment managers found that the average growth fund (which invest mainly in Australian and international shares) achieved a return of just 3.8 per cent in 2001.
This was the lowest annual return since 1994 and reflected the negative returns from international shares (see main article).
Maple-Brown Abbott was the top performer with an annual return of 9.5 per cent in 2001. It was also the top performer in 2000.
It benefited from being significantly under invested in international shares relative to the survey average and over invested in Australian shares, cash and domestic bonds.
As a ‘value’ manager, Maple-Brown Abbott seeks to buy shares that are out of favour and undervalued by the market. As such, it tends to perform well when the market generally is struggling.
Its approach contrasts with ‘growth-oriented’ managers, which target companies that are expected to achieve rapid growth in profits.
‘Growth’ managers achieved the top returns during the bull market conditions of 1999 and early 2000, but have since been eclipsed by ‘value’ managers.
For individual investors, this pattern demonstrates the value of spreading their money across several different investment managers if they want to achieve consistent returns.
Retail investors cannot invest directly in Maple-Brown Abbott’s funds. However, they can invest indirectly via groups like Advance Funds Management, which employs MBA as an investment manager.
InTech Financial Services’ latest survey of 35 investment managers found that the average growth fund (which invest mainly in Australian and international shares) achieved a return of just 3.8 per cent in 2001.
This was the lowest annual return since 1994 and reflected the negative returns from international shares (see main article).
Maple-Brown Abbott was the top performer with an annual return of 9.5 per cent in 2001. It was also the top performer in 2000.
It benefited from being significantly under invested in international shares relative to the survey average and over invested in Australian shares, cash and domestic bonds.
As a ‘value’ manager, Maple-Brown Abbott seeks to buy shares that are out of favour and undervalued by the market. As such, it tends to perform well when the market generally is struggling.
Its approach contrasts with ‘growth-oriented’ managers, which target companies that are expected to achieve rapid growth in profits.
‘Growth’ managers achieved the top returns during the bull market conditions of 1999 and early 2000, but have since been eclipsed by ‘value’ managers.
For individual investors, this pattern demonstrates the value of spreading their money across several different investment managers if they want to achieve consistent returns.
Retail investors cannot invest directly in Maple-Brown Abbott’s funds. However, they can invest indirectly via groups like Advance Funds Management, which employs MBA as an investment manager.