Growth-orientated fund managers dominated the first quarter of 2007, although a concentrated equity fund took out top place on Morningstar's large cap wholesale fund league table.

Alpha Investment Management's concentrated Australian Equity Trust topped the table for the quarter, providing a 10.89 per cent return.

Growth managers in the first quartile for the quarter included IOOF/Perennial's Growth Shares Trust and BlackRock's Merrill Lynch Growth Fund, with returns of 8.95 and 8.58 per cent respectively.

Macquarie's style-neutral Active Plus Equities Fund also posted good numbers with a return of 8.63 per cent.

"Market conditions remained less favourable for value managers, with returns from prominent names like Investors Mutual and Lazard still lagging the index, despite a rebound in Telstra over the quarter," Morningstar consultant Sallyanne Cook said.

The Australian share market gained 6.96 per cent for the March quarter and generated a return of just over 22 per cent for the year to March 31, 2007.

A continuing strong run by commodities boosted the mining sector, while a generally positive reporting season provided gains for much of the industrials sector.

Over the year, two more concentrated funds, BT's Wholesale Focus Australian Share Fund (27.83 per cent return) and SG Hiscock's SGH20 Fund (27.57 per cent return), were the strongest performers.

The best-performing market segment in the March quarter was smaller caps, which provided a return of 7.27 per cent for the quarter and 27.77 per cent for the year to March 31, 2007.

"This healthy performance was due largely to strong gains in the small resources sector over the quarter," Cook said.