Fundies fail the index again

Via the AFR:

The bulk of professional stock pickers have once again been unable to beat the market, as shown by Standard & Poor’s scorecard for the industry, which reveals another disappointing year for the industry in 2017.

Over the 12 months to December 31, the average large-cap Aussie equity fund managed to match the S&P/ASX 200’s return of 11.8 per cent, including dividends. But six in 10 of those funds underperformed the benchmark (the performance of which doesn’t include the costs of tracking the index).

Maybe so. But if you were one of those early birds that jumped into the MB Fund in July and got a more heavily-weighted international equities exposure then you beat the annual S&PASX200 index in just six months at 12% including fees and trading costs.

Why limit yourself to a zombie economy and bourse especially when the currency is so high?

Just sayin’.


David Llewellyn-Smith is chief strategist at the MB Fund which is currently overweight international equities that will benefit from a weaker AUD so he definitely talking his book. Fund performance is below:

Nucleus February Performance

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The information on this blog contains general information and does not take into account your personal objectives, financial situation or needs. Past performance is not an indication of future performance. 


  1. Looking at the public information of one of the big funds here, they under performed.
    Not surprising when you are overweight Dominos!
    Anyway, a bad year, but they have outperformed the benchmark significantly over the past decade, so you can’t win them all.
    I do debate whether an AI bot could do a better job than some of our PMs however!

  2. These reviews are always hilarious. ‘Active’ funds are mostly 85-95% identical to the index with just a few changes (index hugging) as most internal performance metrics are short term and fund rules don’t allow for anything more divergent. Further, if their objective is risk weighted return or uses a different weighting method with lower beta (or has a long term objective) why would you measure against absolute index returns in the short run?

    Media is full of pseudo analysts that don’t understand and haven’t looked at the details.