Despite being a growing reservoir of funds under management, this critically important pool of capital is confronting mounting problems collating and disseminating key data in a timely manner.
The ratings house is pinning its growth strategy on a revamped methodology that increases the emphasis on governance to 25 per cent – a timely move considering APRA’s proposed reforms.
Index beats all traditional bond funds this year
The six-monthly S&P report on the performance of retail active equity funds versus their indices is never a comforting read for supporters of active management. But, this time around, it’s the bond managers who really disappointed.
The report of the S&P Dow Jones Versus Active Funds (SPIVA) for the 12 months to June 30 shows only 47.4 per cent of large-cap Aussie equity retail funds beat the index. However, not a single bond manager beat the index over the same period.
This was a better period, too, for the equities managers in an absolute sense. In the last report, in the year to December 2014, only 38.56 per cent of equities managers beat the index.
The mid and small-cap managers, which usually fare better due to the less efficient nature of those sectors of the market, also did so in the latest survey period. A total of 44.8 per cent beat the mid-small index over a year, 64.9 per cent over three years and 78.2 per cent over five years.
Traditional bond managers more consistently underperform, but, these days, sophisticated investors invariably mix their fixed interest mandates up with a range of asset sub-classes.
The latest SPIVA report shows all Aussie bond managers underperforming for the year to June, 88 per cent underperforming over three years and 81 per cent over five years.
International equities managers of similar funds suffer a similar fate, as they operate in the world’s most efficient markets, particularly the US. The report shows 67 per cent underperformed in the year, 82 per cent over three years and 86 per cent over five years.
