Managed funds bounce back

Christine St Anne  |  25/01/2013Text size  Decrease  Increase  |  

Christine St Anne: Morningstar's latest managed funds survey found that fund managers ended 2012 with some healthy returns. To give us an insight into how well these funds performed, I'm joined by Morningstar's Julian Robertson. Julian, welcome.

Julian Robertson: Thank you.

St Anne: Julian, what managed funds did well in the last quarter of 2012?

Robertson: Well, it was fairly broad brush success for a lot of managed futures and the market was pretty strong so they all (wrote the coattails) of the increase in share markets around the world and domestically. One that probably sticks out the most is the value type managers. And the sectors that did particularly well were things like financials and consumer discretionary and that's a typical hunting ground for the value type managers, and that was common to both Australia and overseas or global investment managers too.

St Anne: Was the good performance a reflection of manager skill or the conditions of the market?

Robertson: Well, it's a combination of both, I guess. A lot of the managers, obviously, are positioned for the uptick in the economy in the market and those managers who added more sensitive buyers to their portfolios tended to do better and that's reflected in the outcome of the value managers, for example. So, it depends on their style and where they were positioned, with a bit of stock selection and a bit of fair wind from the market too.

St Anne: Julian, were there any funds or sectors that lagged?

Robertson: Well, one of the main areas where there was a marginal underperformance was actually in AREITs (Australian real estate investment trusts), it was only very small, but that's obviously after a very strong rise in that particular sector of the market. So, you could say they had a slightly disappointing quarter but they still delivered round about 7 per cent, and it's a notoriously difficult market to outperform any way because of the narrowness of the stocks within the universe.

St Anne: Julian, given the broad range of managers that did well, could we see a return of the market in 2013?

Robertson: Well, it's a difficult question because you are sort of looking at the future here. But certainly there is a few commentators who are of the opinion that the back drops got a lot better, and a few things have been resolved or there is a little less uncertainty regarding the fiscal cliff, for example, in the U.S. and the Chinese data has been little stronger or a little bit more upbeat. But then a lot of that's reflected already in the market with the recent rise. So, there is sort of concern about the valuations of the market at the moment and so net-net it might be difficult for the market to shoot ahead from here, but as always it's always with hindsight that these things are much easier to foretell.

St Anne: Julian, thanks so much for your insights today.

Robertson: Thanks very much, Christine.

Video Archive...

Platinum bullish on US pharma and Chinese tech stocks
25/05/2016  Platinum managing director Kerr Neilson gives insights into the asset manager's approach and areas of investment focus, with a particularly keen outlook on US pharmaceuticals and Chinese technology stocks.
When does market volatility matter to your portfolio?
18/05/2016  Long-term investors should embrace volatility, says Morningstar Investment Management's Dan Kemp, as it offers opportunities, not risk.
Emerging markets: Challenged but on the rise
16/05/2016  JP Morgan's chief market strategist for the UK and Europe, Stephanie Flanders, says that global recession fears are unfounded--but markets remain challenging for investors.
Energy fundamentals feed market volatility
11/05/2016  Oil price volatility and global energy fundamentals are impacting stocks across the board, according to Morningstar's energy analyst Mark Taylor.
Does dollar-cost averaging improve returns?
04/05/2016  Dribbling money in over time can effectively minimise risk, but it's not a wealth-creating process, according to US-based financial planning expert Michael Kitces.
Big bank dividends are sustainable
29/04/2016  Westpac, ANZ and National Australia Bank report half-year earnings in the week commencing 2 May and Morningstar's David Ellis gives investors a taste of what to expect.
Don't expect iron ore rally to continue
26/04/2016  Investors are underestimating how much steel demand could decline, says Morningstar's David Wang.
Japan running out of options to boost growth
26/04/2016  Japan's is into its second lost decade. Have central bankers run out of policy tools? JPMorgan's London-based Talib Sheikh says investors should be wary of further easing.
China businesses are unattractive to investors
20/04/2016  China may be the biggest player in the emerging market universe, but there are far more compelling investment opportunities in Africa and South America, according to a UK-based fund manager.
Where should you invest in Australian media?
15/04/2016  MandA fever may be building towards a "Groundhog Day" ahead of a potential relaxation of media ownership laws in Australia, as structural headwinds continue to intensify.
Where should you invest in Australian media?
15/04/2016  M&A fever may be building towards a "Groundhog Day" ahead of a potential relaxation of media ownership laws in Australia, as structural headwinds continue to intensify.
China's debt is not a problem
15/04/2016  The International Monetary Fund has expressed concerns about China's debt levels but Doug Turnbull of the UK-based Neptune Investment Management says the debt is concentrated and not a problem.
Value investing in a low growth environment
07/04/2016  Morningstar's Daniel Needham explains how to buy an equity or bond at less than its intrinsic worth in a world where the reward for risk investing is diminished.
5 demographic trends driving investment profit
06/04/2016  What is the influence of workers and consumers on stock markets? Dr Amlan Roy explains the implications for asset prices and capital flows, emerging markets and sustainability.
The Morningstar Economic Moat Rating
01/04/2016  The Morningstar Economic Moat Rating represents a company's sustainable competitive advantage. A company with an economic moat can fend off competition and earn high returns on capital for many years to come.
Why you should shun popular stocks
31/03/2016  Investors cannot all buy the same stock at the same price--popularity affects price and leads us to buy high and sell low, obliterating any profit we could have gained.
How to break from the crowd and be a successful investor
31/03/2016  Sir John Templeton stated that: "It is impossible to produce superior performance unless you do something different from the majority." James Montier from asset manager GMO explains how.
Is it too late to invest in Japanese equities?
22/03/2016  The easy money has already been made in Japan, the UK-based Polar Capital's James Salter says, but look for those cyclical stocks with depressed prices and you can still make a profit.
Don't lose the overconfidence game
22/03/2016  Investors who are overconfident in their abilities may trade more often and hurt themselves in the end, says UC Berkeley professor Terry Odean.
What's in store for Telstra shareholders?
18/03/2016  Morningstar's Brian Han talks investors through Telstra's half-year result and why the telecoms giant has been trailing the market since the start of 2016.