Active global managers outperform in 2015

Active global equity managers generally outperformed their benchmark over the past 12 months, delivering excellent returns for investors in 2015, according to research house Zenith.

The Zenith Investment Partners “2015 Global Equity Sector Review” revealed the return generated by the MSCI World Index ex-Australia in A$, used to measure the peer group, for the 12 months ending 30 September 2015 was 18.9 per cent.

For the three-year period ending 30 September 2015, the index delivered a 24.2 per cent return per year.

According to Zenith global equity lead analyst Quan Nguyen, a number of key reasons accounted for a larger proportion of active managers outperforming the benchmark compared to the underperformance in the previous year.

“One of the reasons has been the significant increase in the level of performance dispersion in the markets, at both a sector and geographic level,” Nguyen said.

“Greater performance dispersion has meant there have been greater opportunities for active managers to add value through stock selection and portfolio construction, and active managers have taken advantage of the situation.”

The proportion of actively managed global equity funds on Zenith’s approved list that outperformed the benchmark was 55 per cent for the 12 months to September 2015.

Nguyen added that although most actively managed funds employed a bottom-up stock selection approach, the key to outperformance was the ability to make the right calls in certain geographies and sectors, “namely, being overweight North America relative to the rest of the world, overweight developed markets relative to emerging markets, and overweight in consumer, IT and healthcare sectors relative to the energy and materials sectors”.

He said while the long-term analysis showed value outperformed growth, Zenith had recently witnessed growth-style managers generally outperforming their value-style counterparts.

From an initial investment universe of 227 international share products, Zenith rated 14 funds highly recommended, 80 funds recommended and 16 funds approved.


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