This is the third year Investor Weekly has been associated with the prestigious Standard & Poor’s (S&P) Fund Awards and the third year they have run in Australia.
We all like to see the underdogs have a fair crack at the whip, and last’s year’s overall winner, Tyndall Investment Management, showed it was possible for a boutique manager to scoop the top spot. This year, however, belonged to the big investment managers.
Fund management behemoth Barclays Global Investors was crowned Fund Manager of the Year and BT Financial Group dominated the remaining awards, winning three out of the 10 categories.
The most important results for the industry, however, are not how well managers performed last year. It is how well they will perform next year. With a backdrop of a booming economy and soaring equities prices it is hardly surprising funds have been breaking records. In fact, it is expected.
Most recognise, however, that these returns will not continue. The challenge ahead for fund managers, both large and small, will be to generate returns in a far tougher economic environment.
That is why the boardrooms and coffee shops of Australia’s financial capitals have been reverberating to talk of alpha and beta. In fact, a basic understanding of ancient Greek has become a necessity. And to many, the myriad strategies suggested do seem very similar to ancient Greek.
Our feature this month is on hedge funds. Investing in these vehicles is one way in which superannuation funds are trying to diversify their returns. They are seeking ways to avoid the inevitable decline in the traditional equity markets and produce returns that are not correlated to the wider market.
As the feature shows, healthy, uncorrelated returns are indeed possible, but it is a path strewn with obstacles and sound knowledge of both hedge fund managers and their strategies is essential.
Commodities are seen as another attractive source of diversified returns. But are they? Many are predicting an end to the commodities boom and challenging the theory China will provide a never ending source for Australia’s mining exports.
Investor Weekly has taken on a commodities specialist as a columnist to explore these very issues. Greg Smith is a founder and chief executive of Adelaide-based fund manager Global Commodities, and has 25 years’ experience in the industry. He is a man who pulls few punches so we hope you gain valuable insight from his forthright outlook.
As ever, if you have any comments on our articles or suggestions for content please don’t hesitate to get in touch with me on corbett@ investorinfo.com.au.
I would also like to announce the appointment of Christine St Anne as the magazine’s deputy editor. Many of you know Christine and I hope will join me in congratulating her on a well deserved promotion.
