Recently, I was having a look at the best and worst performing Australian share managers last financial year (i.e. FY 2013/14)
Firstly the facts:
- The manager that topped the list came in 120th in FY 2012/13.
- The managers that came in second, third and fourth came in 139th, 135th and 134th in FY 2012/13 respectively
- A manager that finished in the bottom five worst performing managers in FY 2013/14 finished in the top 10 in FY 2012/13
These types of turnarounds are not unique to Australian shares. They apply to every asset class.
What is this telling me?
- It is very, very difficult to consistently beat the benchmark let alone your competitors.
- 12 months is not long enough to judge the quality of a fund manager
- Don’t chase returns.
- Don’t automatically think that higher management fees equates to higher performance.
Bye for now
Source: The Australian Financial Review July 17, 2014 Jessica Sier