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Jeffrey Hutton is a Morningstar contributor. The views expressed in this article are those of the speakers.

Philip Parker, managing director and chief investment officer of Parker Asset Management, is a man in demand.

A report this week showed the investment company, which he set up in early 2000 and which now has $200 million under management, was the top-performing fund manager in Australia last year.

Out of 102 long-only funds, the company's Parker Enhanced Leaders Trust [3877] was the only one to see gains in 2011, the Mercer Investment survey said. Over three years, Parker Asset Management ranked number three, with 14 per cent returns a year.

Currently in New York on a business trip, Parker is fielding calls from media on his mobile phone and may appear on CNBC next week as part of a segment on fund managers who are beating the market.

"They're going to see if they can squeeze me in," Parker said in a phone interview.

While an 11 per cent slump in Australia's sharemarket made life hard for portfolio managers, the results of the Mercer survey will heighten pressure on fees and underline the dangers of bias towards to the local market.

"If people are losing money year after year we think it's abhorrent to be charging fees," says Parker, whose fund charges 1 per cent of assets under management.

The median Australian shares manager outperformed the ASX 200 by 0.6 per cent during the 12 months ended December 2011, slightly better than in 2010 when median returns were 0.6 per cent worse than the market, Mercer said.

Overseas sharemarkets declined, too, but not as much as they did in Australia.

"Fund managers are probably just covering their fees," says Mercer principal David Carruthers.

Carruthers points out that over 20 years, portfolio managers have outperformed the market by about 150 basis points.

"It's not a great result," said Carruthers, referring to the 2011 survey, "but it's not the end of the world."

Parker chalks up his company's performance to "a low pain threshold," preferring to rethink investments when trouble crops up.

"We don't believe in 'set and forget,'" Parker says. "We believe in 'check and no regret.'"

In April last year, Parker and his portfolio manager Tim Riordan bet that banks and some large-cap stocks such as BHP Billiton (BHP) and Rio Tinto (RIO) had had their run. As for retailers, Parker stumped for Woolworths (WOW) and nothing else.