Investopoly by Stuart Wemyss

Author:Stuart Wemyss [Wemyss, Stuart]
Language: eng
Format: epub
Publisher: Major Street Publishing
Published: 2018-04-02T00:00:00+00:00

Industry expert Robert Arnott, founder of US-based firm Research Affiliates, spent two decades studying the top 200 active US fund managers with at least $100 million under management. He concluded that from 1984 to 1998, a full 15 years, only eight out of 200 fund managers beat the Vanguard 500 Index. That is, 96 per cent of active fund managers failed to beat the market over this 15-year period.

The median Australian active manager’s return (after fees) for the five years to 2006 was 13.7 per cent. The S&P/ASX 300 index’s return for the same period was 15.9 per cent. That said, the five years to 2006 made up a very strong bull market. Theoretically, active managers’ skills should be more obvious in a falling market because, let’s face it, anyone can make money in a rising market. So let’s look at the year ended 30 June 2008. The median active fund manager lost 14.05 per cent for this year compared to the S&P/ASX 200’s loss of 13.75 per cent over the same period according to Mercer (after adjusting for fees per Morningstar).

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