Rainmaker Information has just released its latest managed funds investment report for the three year period to 31 March2019.
International equities was the top performing asset sector, achieving median returns after fees of more than 13% p.a. Large cap diversified global equities slightly edged emerging markets international equities by a small margin however.
The Australian equities asset sector was close behind with median returns for the sector of 11.2% p.a. for large cap Australian equities and 9.9% p.a. for small cap managed funds.
In last place was the international fixed interest bond sector with median returns of 3.4% pa. In second last place was the Australian fixed interest sector with median returns of 4.1% p.a.
The sector median was outperformed by the relevant index in each of the below strategies except for international fixed income (Bloomberg Barclays Global Agg Hedged with 3.2%) and combined property (the S&P ASX200 A-REIT Index matched the sector median with 9.9%).
Rainmaker's head of investment research, John Dyall, said "the last three years has been a fascinating period for equities markets, both internationally and in Australia. The headline numbers can hide a lot of important information from investors."
"Where you are invested and your managed fund's currency position has had a large effect on your returns. Currency has added a lot to the international equities returns if you are unhedged, while Australian resource stocks have eclipsed returns from industrials," explained Dyall.
As a result, Dyall cautioned investors to look behind the headline investment return figures because consistency of investment returns is ust as important. Plus investors should be careful to invest into managed funds with clear investment objectives that they are committed to.
"While headline returns are a key measurement of success for managed funds, consistency of returns and the ability of a fund to match its performance to its stated investment objective are also crucial factors when comparing funds."
1 Growth funds have more than 75% of their assets in growth assets such as equities and property, balanced funds have between 55% and 75% and capital stable funds have less than 55%.
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Total risk market inflows were down a marginal 0.6% over the year to June 2024, decreasing from $18.3 billion to $18.2 billion.
Dual access ETPs, which are transacted both on stock exchanges and off-market through funds managers, can cost four times as much as the rest of the Australian ETP market.
