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(August-2004) Home-grown favourites: Local versus global concentration
Results show long term view pays
InTech’s survey of growth-oriented super fund managers for the year to end June shows that despite the fluctuations in the Australian dollar over the year, currency movements had a modest impact on returns compared to other years
To Morningstar head of consulting Anthony Serhan “this is a good time to reflect on the value of long term strategies when investing. Those that try and guess on a short term basis will invariably be caught short”.
Similarly InTech notes that “2003-04 was a good example of the importance of sticking to the long-term strategy. Super fund members who on the back of successive negative annual returns during 2001-02 and 2002-03 had consequently changed course and moved to a more defensive strategy, would not have reaped the benefits of the good return of the past year”.
InTech’s survey shows Australian shares rose 21.6 per cent, international shares 19.6 per cent (in Aussie dollar terms or 20.2 per cent in local currency terms), listed property 17.2 per cent, unlisted property 10.9 per cent, Australian bonds 2.4 per cent, international bonds 3.1 per cent and cash 5.3 per cent
SuperRatings managing director Jeff Bresnahan notes that fixed interest accounts for 22 per cent of assets in balanced funds. Given this, the big drag on the overall return of balanced funds has been fixed interest, returning only 2.5 per cent to the year to end-June (two per cent net of taxes and fees).
Looking at international equities, Morningstar reckons that world share prices are likely to continue to go sideways in coming months. It highlights positive signals — job growth in the US, a rethink of likely economic growth in Japan, diminishing fears about a ‘hard landing’ in China. The negatives Morningstar focuses on are oil prices and “some fund managers are of the view that the global economic cycle has peaked”.
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TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
DomaCom DFS Mortgage
74.26 3 y p.a(%)
2
Global X 21Shares Bitcoin ETF
72.60 3 y p.a(%)
3
Global X GlobalX FANG+ ETF
44.46 3 y p.a(%)
4
Pengana High Conviction Equities B
39.12 3 y p.a(%)
5
Pengana High Conviction Equities A
39.05 3 y p.a(%)
