Funds fail to add value
Mercer Investment Consulting has produced a report critical of wholesale fund managers' ability to add value.av
Thursday, April 9th 1998, 12:00AM
Research from Mercer Investment Consulting says balanced superannuation fund managers are not adding value to their clients' portfolios.Mercer does a monthly survey of the wholesale superannuation market, which covers 12 mangers and funds of about $12 billion.
It has completed an analysis of the funds to try and determine how much value managers were adding above their relative benchmarks.
Mercer says, in its April newsletter, that of the 12 managers just two of them are actually adding value of more than 0.5 per cent.
"This suggests that few balanced managers will be achieving their client's performance objectives," Mercer says.
The firm says most balanced managers are active asset allocators, and not many of them are successfully fulfilling that role.
"Most managers are subtracting value through their active asset allocation activities."
Mercer says funds which invest via a properly managed sector-specialist structure substantially improve the odds of achieving superior performance over the balanced alternative.
The full text of Mercer's article can be found on Good Returns' features page CLICK HERE
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