The volatility in global stock markets in the third quarter of 2011 saw growth assets take a battering, with three out of five large cap managers underperforming the index, according to Morningstar.
The S&P/ASX300 accumulation index fell 11.65 per cent over the quarter, with only 40 of 101 large cap managers in Morningstar's managed fund performance league tables performing better.
The best-performed manager in the category, the Investors Mutual Wholesale – Industrial Share lost 5.72 per cent, largely because it avoids resources stocks; the resources sub-index lost 18.8 per cent in the quarter.
Small cap managers performed similarly overall, but with greater day-to-day volatility and a wider divergence between the best and worst performed managers, according to Morningstar. The S&P/ASX Small Ordinaries Accumulation Index lost 11.79 per cent – just a fraction more than the large cap index.
Unhedged global managers were cushioned somewhat by the fall in the Australian dollar with the top performer, Magellan Global, gaining 2.44 per cent.
Both local and international listed property investors also struggled, while safe haven managers across assets such as fixed interest and gold performed well. The best returns came from value-style managers, albeit with a wide dispersion of returns, Morningstar found.
The main contributing factor to the poor overall returns was the heightened concern about the European debt crisis, along with deteriorating economic data from major developed nations and concerns over slowing Chinese economic growth, according to Morningstar.
