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...

Possible $2.5bn tailwind to drive hybrid demand in 2017
22/02/2017  Strong supply dynamics and ongoing economic stability should create significant opportunities for hybrid investors in 2017, according to John Likos, senior credit analyst, Morningstar Australia.
Earnings season wrap: Telstra feels competitive heat
17/02/2017  As the 1H17 earnings season rolls on, Wesfarmers posts a bumper profit, Newcrest restores its interim dividend, while Telstra's profit falls as it feels the heat of intense competition.
Earnings season wrap: Rio Tinto's dividend surprises
10/02/2017  Rio Tinto delivers a surprise full-year payout of US$1.70, NAB records a soft first quarter, and CIMIC posts an annual net profit in line with Morningstar's expectations.
Leveraging the opportunity of international students
07/02/2017  Co-founder and CEO of Navitas, Rod Jones, explains the firm's business model, which is built largely around international students and university partnerships.
Xero CFO gives outlook for 2017 and beyond
02/02/2017  Sankar Narayan, chief operating and financial officer of accounting software firm Xero gives his insights on the company's business model and outlook, with Morningstar analyst Gareth James adding his views
Asia growth engine not threatened by Trump, says Barings
30/01/2017  Long-term investors in China and wider Asian equities should not worry about President Trump, says Barings head of Asian equities Hjung Jin Lee.
Shifting fortunes for ANZ, more of the same for CBA in 2017
12/01/2017  Australian banks are well-positioned as they head into 2017, with ANZ moving from least profitable in 2016 to become one of the sector's top performers and CBA remaining an investor favourite.
Is Trump a threat to emerging markets?
12/01/2017  Is President Donald Trump a threat to emerging market returns? Paul Jackson from the UK-based Source ETF considers the outlook for sector and where investors can find the best opportunities.
Platinum, Aussie banks and Peter Warnes among top interviews of 2016
22/12/2016  We look back on some of our most notable interviews of the year, as Morningstar analysts and external experts helped us delve into some of the biggest events that shaped Australian and global markets in 2016.
Oil price finds sweet spot, while mining hits rock bottom
20/12/2016  The rise in oil prices should see improved performances from Australian producers in 2017, while mining services companies will continue to struggle amid weaker Chinese demand, says Morningstar equity analyst Mark Taylor.
How Greek mythology can make you a better investor
07/12/2016  Don't be over confident or follow the herd, and like Odysseus, learn to have yourself "tied to the mast" when it comes to long-term investing.
Supermarket headwinds prompt fair value cut for majors
06/12/2016  Growing competitive pressures and a declining revenue outlook for Australia's two grocery giants now look to be part of a longer-term, structural shift.
What returns should you expect from markets?
01/12/2016  As market risks rise, investors must adjust their profit expectations--gone are the days of 8 per cent returns. But there are still growth opportunities out there if you know where to look.
Why healthcare stocks got a bump from Trump
28/11/2016  Australian healthcare and pharmaceutical companies continue to enjoy a purple patch, and for various reasons including the recent US election result, explains Morningstar's healthcare equities analyst Chris Kallos.
Equity and hybrid investors react as bond prices tumble
24/11/2016  The negative correlation between bonds and equities is reasserting itself following the US election of Donald Trump, according to John Likos, Morningstar's senior credit analyst.
2 global themes that are finding favour among ETF investors
15/11/2016  Australian retail investors are increasingly turning to ETFs for specific tactical exposures to global themes, particularly in the context of large-scale market events such as US election 2016.
Maintain discipline and stick to fundamentals when selecting stocks
14/11/2016  Steer clear of fads, maintain a disciplined approach and focus on company fundamentals in building and maintaining your investment portfolio, says Anton Tagliaferro, investment director, Investors Mutual
How Trump could impact economic growth
10/11/2016  Slowdowns in trade and immigration could hold back the US, and infrastructure spending could boost GDP, but it's too early to make any major changes to our economic forecast, says Morningstar's Bob Johnson.
President Trump: What should you do?
10/11/2016  Donald Trump has beaten Hillary Clinton to become the 45th US president. What should investors do?
Software companies worth watching amid tech deployment phase
08/11/2016  Kate Howitt, portfolio manager at Fidelity International discusses some of the core phases in technological disruption and identifies software companies among those currently presenting opportunities.