Equity funds bled a sea of red over the September quarter, according to the latest Aon Hewitt NZ manager survey.
However, in one of the most volatile three-month trading periods since the GFC, the median manager in both the Australasian and global (unhedged) shares outperformed their respective benchmarks over the quarter, the Aon survey shows.
In the case of Australasian equities the median manager only just pipped the index, recording a loss of -1.7 per cent in the three months to September 30 compared to a drop of -1.8 per cent in the NZX50 Gross index. Over the month to the end of September, the median manager in the Aon survey underperformed the index with a -1.2 per cent return versus the benchmark -0.6 per cent loss.
The median global equity fund covered by Aon returned -3.4 per cent over the quarter and -4.2 per cent for the month on an unhedged basis compared to the index performance of -4.3 per cent and -4.6 per cent respectively.
“All of the domestic equity funds in our survey delivered negative returns over the month – with the exception of the Devon Dividend Yield Fund which returned 0.8 per cent,” the Aon survey says. “Salt’s Javelin Fund and Castle Point’s Trans Tasman Strategy were the worst performers, returning -1.9 per cent over the month. For the quarter, returns ranged from -3.5 per cent (ANZ’s Australasian Equity fund) to 1.4 per cent (Devon’s Dividend Yield Fund).”
However, all Australasian share managers in the survey remained in positive territory over the one-, three-, and five-year periods with the Mint Trans-Tasman Equity fund the best-performer over the longest time-frame, returning 17.9 per cent in the five years to September 30.
Australian manager Magellan once again topped the unhedged global shares rankings for the quarter, recording the only positive result for the period of 1.7 per cent. Magellan kept the number one spot in the category over the one-, three-, and five-year periods.
Quarterly returns in the unhedged global shares sector ranged from Magellan’s 1.7 per cent to -13.7 per cent for the Russell Emerging Markets fund.
Only Elevation Capital stopped Magellan from taking out a clean sweep across all time periods with the Auckland-based firm’s Value Fund returning -2.9 per cent in September – just 0.1 per cent better than the high-flying Australian manager.
All fixed income funds in the Aon survey reported positive returns over the quarter and month, with the single exception of the Brandywine global bond fund, which was down -3.3 per cent for the quarter and 0.9 per cent in September.
“The median NZ Bond fund returned 2.2 per cent for the quarter and 9.3 per cent over the last 12 months,” the Aon survey says. “Global bonds outperformed NZ bonds over September but underperformed over the last quarter and over the last 12 months. The median Global Bond fund has returned 1.3 per cent over Q3 and 6.1 per cent for the last 12 months.”
The Aon survey returns are reported gross of tax and fees.