The latest review of Australian equities by research house and ratings company Lonsec has found its actively managed funds have clearly outperformed index funds in all recent major time frames.
According to its Australian Equities Sector Review, Lonsec found the 137 active managed funds it provides investment ratings for have outperformed their corresponding index by an average of 1.54 per cent on an after fee basis during the past three years but also across other significant comparison periods.
“The findings are very topical given the ongoing debate about the ability of active funds to outperform passive or index funds,’’ Lonsec senior investment analyst Peter Green said.
“The results from the active managers within our peer group clearly shows the benefit of careful selection of fund managers,” Mr Green said.
“The case for supporting active management is evident across most time frames and these results highlight that it can be worthwhile paying for active professional large cap stock pickers,’’ he said.
Lonsec remains agnostic in the wider debate about active versus passive funds and lets the results stand on their own merit; however, it does have a view as to what constitutes a ‘highly recommended’ active manager.
“In a crowded market place, the difficulty is how to sort the good from the mediocre. For our research and ratings purposes we have carefully investigated what it takes to stand out from the pack,” Mr Green said.
Source: Lonsec
