Australian share fund managers beat the market index in 2017, with the top managers producing returns of more than 20 per cent.
The median return of the managers in the Mercer Australian share managers survey was 13 per cent for the 12 months to the end of December. The S&P/ASX 300 index was up 11.9 per cent over the same period.
The Aussie equity managers in the Mercer survey also outperformed over three and five-year period.
Over the three years to the end of 2017, the median manager return was 9.8 per cent a year, compared with the 8.8 per cent average annual increase in the index. Over five years the median manager returned 11.8 per cent a year, while the index was up 10.1 per cent a year.
The top-performing fund over 12 months was Bennelong Concentrated Equities, which produced a return of 30.7 per cent.
Among the other top performers, the Selector High Conviction Equity Fund was up 26 per cent, Platypus Australian Equities up 24.2 per cent, Alleron Growth up 23.9 per cent and Macquarie High Conviction up 23.1 per cent.
Mercer’s research manager Yee Hou Seck says: “The strategies that performed strongly last year were growth and quality focused stock pickers. There was some commonality of stock exposures, with names that stood out including CSL, which was up 42.6 per cent over the year, and Aristocrat Leisure, which rose 55 per cent.”
Outside the S&P/ASX 100, common holdings that produced strong returns included IDP Education and Reliance Worldwide.
“Looking at the Bennelong Concentrated Equities portfolio, 37 per cent of the holdings were outside the S&P/ASX 100. This highlights the benefit of being less constrained in an investment process,” Seck says.
The top-performing industry sectors were information technology (up 26.1 per cent), healthcare (up 25.9 per cent), materials (22.7 per cent) and energy (22.4 per cent).
The weak sectors were telecommunications (down 20.7 percent) and financial (up 5.3 per cent).