Australian equities returned an impressive 24.5 per cent for the year to December 31 2006.
For a third consecutive year the markets recorded returns of over 20 per cent with blue chip resource, banking and consumer discretionary stocks leading the field.
According to Morningstar research the highest-performing large-cap share funds for the year were the BT Wholesale Focus Australian Share fund and the Fidelity Australian Equities fund with returns of 33.13 per cent and 29.83 per cent respectively. AMP’s Value Plus fund was at the back of the pack, returning 14.93 per cent.
“The market generally favoured growth over value-style managers in 2006, especially those maintaining overweight allocations to resource stocks,” Morningstar investment consultant Sallyanne Cook said.
Large-cap growth-style funds produced on average a return of 23.1 per cent for calendar 2006, while the average return from their value-style counterparts was 21.4 per cent.
Small cap funds outshined their larger counterparts with an average return of 34.2 per cent.
Two smoking guns with relatively small assets under management led the way, with Macquarie’s small-caps fund climbing 65.1 per cent over the year, while Challenger Wholesale Microcap returned 57.2 per cent.
“Investing in smaller companies did not provide a free ride for all fund managers, however, as MMC’s value-oriented funds had a disappointing year, for example, the firm’s Value Growth Trust was the worst performer, returning 9.70 percent,” said Cook.
