Top Performing Managed Funds to June 2009

Introduction to the managed funds report

For the third consecutive year fact sheets for the top performing managed funds in pre-selected Morningstar categories have been prepared. In total we include fact sheets for 64 managed funds as well as four spreadsheets comparing funds of the same category.

Due to the large number of managed funds available to investors there was a need to be selective with the funds to be included in the study. We have focused on fact sheets in the following categories ¹:

• Australian equities large caps (blend, growth, value, alternative)
• Australian equities medium-small caps (blend, growth, value)
• International large caps (blend, growth, value)
• International medium-small caps(blend, growth value)
• Regional (Asia ex-Japan, Japan, North America, Europe, emerging markets)

 

Funds included in the study were selected on the basis of their 5-year performance and ability to invest directly in the fund for no more than $50,000.

Another criterion is the split between income and growth – high income suggests that the fund has engaged in a trading strategy which may mean there is a high tax liability to the unit holder on distributions received.

In keeping with AIA’s status, no investment recommendations are made, nor judgment made about any particular aspect of a fund. Only information has been supplied.

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What to look for when selecting managed funds

A group of AIA members (Brisbane Managed Investments Group BMIG) have identified seven factors to consider when evaluating a managed fund ².

These features/aspects were:

• Costs - entry/exit, MERs, buy/sell spreads, performance fees
• Investment Process – the philosophy, methodology and style of investing
• People – the capacities, experience and reputation of those involved in the investment process and responsible for the fund’s investment decisions
• Performance – fund size and inflows, cumulative returns, annual returns, volatility
• Administration Service – timeliness and accuracy of the services provided by the manager or administrator
• Economic Situation and Financial Markets – supportiveness of the economy and markets for investing in the sector, region and/or asset class
• Professional Research Data Availability – Morningstar, Standard & Poors etc.

Managed fund selection

Due to the large number of funds available to investors there was a need to be selective with the funds to be included in the study. Managed funds to be included were selected on the basis of (but not exclusively) the following criteria:

• 5-year performance as at 30.6.2009 ³.
• Minimum investment at most $50,000.
• Ability to invest directly in the fund.

 

The requirement for a five-year history excluded several funds which performed well over shorter periods.

Sources of Data

The prime source of data was information supplied by the fund managers. Other sources of data were the Fund Manager’s website, Product Disclosure Statements and Fund Reports from the fund managers, and the Morningstar website.

Performance Indices

Each managed fund Fact Sheet uses two separate indices as reference points for the fund performance.

The cumulative returns are compared to the Fund’s nominated benchmark index. This allows the reader to make a judgment about how well the fund has performed against its own internally established performance objectives. This information is presented in the table to the left of the bar chart.

The annual financial returns are compared to the ASX All Ordinaries Accumulation Index. This was nominated as a suitable “absolute performance” benchmark for all managed funds in the study. One rationale is that Australian investors, who are exposed to Australian costs and currency, mostly invest in Australian equities and regard this as an important benchmark for them. However it is also useful in other ways: having the same curve on all graphs gives immediate graphical display of the scaling of the vertical axis of a particular graph; for international funds, the degree of correlation between the fund and the All Ordinaries, which may be desired to be low to reduce volatility, can be easily considered.

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How the Managed Funds Tables & Fact Sheets are presented

The structure and layout of this information is shown in Figure 1.

 

Figure 1. Report Layout

Australian Equity Funds

Australian Equity Funds are further categorised, using the Morningstar classification protocols as shown in Figure 2. Numbers in the boxes show the number of funds in each category for which Fact Sheets have been produced.

Figure 2. Australian Equity Funds Included in the Study

It is interesting to note that the number of Australian large cap equity funds listed in 2009 increased from 16 to 27 for the 2009 financial year. The number of Australian small cap equity funds also increased from nine to 13 including five growth funds compared to only one for the 2008 financial year.

World Equity Funds

The World Equity Funds for which Fact Sheets have been produced are also categorised using the Morningstar classification protocols as shown in Figure 3.

Figure 3. World Equity Funds Included in the Study

With regard to World Funds, two Morningstar categories included last year did not make it this year. They were Global Technology and Equity World Other. The number included did not change.

Not surprisingly, the number of Regional Funds listed reduced from 15 included last year to only nine this year. Equity Europe and Equity North America are two categories which also did not make the listing this year.

The Tables

Key statistics and performances of the managed funds are summarised in four tables. Each of the tables contains the following Information:

• APIR Code
• Fund Name
• Morningstar category
• Minimum Initial Investment
• Fund Size to either 30 June 2009 or 31 July 2009
• 1 year, 3 year and 5 year returns
• Annual Returns to 30 June for the last five years where data is available. Figures in green indicate the fund performed better than the ASX All Ords. Figures in red indicate the fund performed worse than the ASX All Ords.

Managed Fund Fact Sheets

Key information about each fund is presented on the “Fact Sheets” and includes:

• Title, APIR and Morningstar Identification Codes
• Fund Manager and a link to its website
• Objectives
• Size ⁴
• Minimum Investment
• Fees
• Fund Performance
• Income and growth breakdowns for the 1, 3 and 5 year returns
• A bar chart showing the annual performance of the fund for the last five years compared to the ASX All Ordinaries Accumulation Index
• Investment Style
• Investment Strategies
• Key People

Information presented on some fact sheets will be more scant than others. Where information is missing, particularly for the income and growth breakdowns, information was not provided by the fund manager. For further information, use the hyperlink to move to the fund’s website.

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Managed Funds Fact Sheets & Tables

Table 1: Funds in Australian Large-Cap Categories

View all the funds selected for Australian Large Cap Categories.

Fact Sheets

• K2 Australian Absolute Return Fund (Alternative Long/Short)
• Aviva Investors Elite Opportunities Fund (Aust Large Blend)
• Aviva Investors Personal Elite Opportunities Shares Fund (Aust Large Blend)
• Aviva Investors Professional High Growth Shares Fund (Aust Large Blend)
• BT Wholesale Ethical Share Fund (Aust Large Blend)
• BT Wholesale Imputation Fund (Aust Large Blend)
• EQT Flagship Fund (Common Fund No.2) (Aust Large Blend)
• Goldman Sachs JBWere Australian Equities Wholesale Fund (Aust Large Blend)
• Prime Value Growth Fund (Aust Large Blend)
• Prime Value Growth Fund – Class B (Aust Large Blend)
• UBS Australian Share Fund (Aust Large Blend)
• Ausbil Australian Active Equity Fund (Aust Large Growth)
• BlackRock Australian Share Fund Plus (Aust Large Growth)
• BlackRock Wholesale Australian Share Fund (Aust Large Growth)
• Fortis Investments Australian Equity Fund (Aust Large Growth)
• Goldman Sachs JBWere Leaders Fund (Aust Large Growth)
• Hyperion Australian Growth Companies Fund (Aust Large Growth)
• ING Wholesale Select Leaders Fund (Aust Large Growth)
• AXA – Wholesale Australian Equity Value Fund (Aust Large Value)
• Perennial Value Australian Shares Trust (Aust Large Value)
• Perennial Value Shares Wholesale Trust (Aust Large Value)
• Perpetual WFI Perpetual’s Australian Share Fund (Aust Large Value)
• Perpetual WFI Perpetual’s Concentrated Equity Fund (Aust Large Value)
• Perpetual Wholesale Australian Fund (Aust Large Value)
• Perpetual Wholesale Concentrated Equity Fund (Aust Large Value)
• Perpetual Wholesale SHARE PLUS Long-Short Fund (Aust Large Value)
• Zurich Investments Australian Value Share Fund (Aust Large Value)

Table 2: Funds in Australian Mid-Small Categories

View all the funds selected for Australian Mid-Small Categories.

Fact Sheets

• Aberdeen Australian Small Companies Fund (Aust Mid/Small Blend)
• BT Wholesale Smaller Companies Fund (Aust Mid/Small Blend)
• Eley Griffiths Group Small Companies Fund (Aust Mid/Small Blend)
• Souls – Australian Equity Fund (Aust Mid/Small Blend)
• UBS Australian Small Companies Fund (Aust Mid/Small Blend)
• Ausbil Australian Emerging Leaders Fund (Aust Mid/Small Growth)
• Australian Ethical Smaller Companies Trust (Aust Mid/Small Growth)
• Aviva Investors Prof Small Companies Fund (Aust Mid/Small Growth)
• Hyperion Small Growth Companies Fund (Aust Mid/Small Growth)
• ING Wholesale – Emerging Companies Trust (Aust Mid/Small Growth)
• Ganes Focused Value Fund (Aust Mid/Small Value)
• Perennial Value Smaller Companies Trust (Aust Mid/Small Value)
• Perpetual Wholesale Smaller Cos Fund (Aust Mid/Small Value)

Table 3: Funds in World Categories

View all the funds selected for World Categories.

Fact Sheets

• Australian Ethical Larger Companies Trust (Equity World – Australia)
• Optimix Wholesale High Growth Trust (Equity World – Australia)
• BlackRock Global High Conviction Fund - Hedged Class C (World Large Blend)
• BlackRock Global High Conviction Fund - Hedged Class D (World Large Blend)
• DWS Global Equity Thematic Fund (World Large Blend)
• EQT Intrinsic Value International Sharemarkets Fund (World Large Blend)
• Goldman Sachs JBWere Hedged International Wholesale Fund (World Large Blend)
• Macquarie Sharemarket Fund – International Shares (World Large Blend)
• Platinum International Brands Fund (World Large Blend)
• Zurich Investments Global Thematic Share Fund (World Large Growth)
• Aberdeen International Equity Fund (World Large Value)
• Platinum International Fund (World Large Value)
• Fiducian Global Smaller Cos & Emerging Markets Fund (World Mid/Small Blend)
• Hunter Hall Value Growth Trust (World Mid/Small Blend)
• Schroder Global Smaller Companies Fund (World Mid/Small Blend)

Table 4: Funds in Regional Categories

View all the funds selected for Regional Categories.

Fact Sheets

• Aberdeen Asian Opportunities Fund (Equity Asia w/o Japan)
• BT Wholesale Asian Share Fund (Equity Asia w/o Japan)
• Challenger Wholesale Asian Share Fund (Equity Asia w/o Japan)
• K2 Asian Absolute Return Fund (Equity Asia w/o Japan)
• Maple Brown Abbott Asian Investment Trust (Equity Asia w/o Japan)
• Platinum Asia Fund (Equity Asia w/o Japan)
• Aberdeen Emerging Opportunities Fund (Equity Emerging Markets)
• Invesco Wholesale Asian Share Fund (Equity Japan)
• Platinum Japan Fund (Equity Japan)

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Disclaimer

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