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.

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