Only a small percentage of active Australian equity fund managers were able to beat their benchmarks last year, in the worst year for active managers over the past five years. The best results were in the mid and small-cap sector.
According to S&P Dow Jones Indices’ latest SPIVA Australia Scorecard, only 13.3 per cent of “general equity funds” beat the S&P/ASX 200 benchmark last year.
Measured over five years 20.4 per cent of funds outperformed, and over 10 years 16.8 per cent outperformed.
Mid and small-cap funds produced better relative performance, with 48.1 per cent of funds beating the S&P/ASX Mid-Small Index.
Measured over five years 29.9 percent of mid and small-cap funds beat their benchmark, and over 10 years 52.8 per cent outperformed.
The relative performance of Australian bond funds was particularly poor. Only 1.6 per cent of funds beat the S&P/ASX Australian Fixed Interest Index last year. However, on a risk-adjusted basis (taking return volatility into account), 37.8 per cent outperformed.
In the international equity category, 20.6 per cent of funds beat the S&P Developed Ex-Australia LargeMid Cap Index. Measured over five years 10 per cent of funds beat the benchmark, and over 10 years 10 per cent outperformed.
Last year, 4.3 per cent of Australian funds from all categories were merged or liquidated. Mid and small-cap funds went out of the market at the fastest rate (8.5 per cent).