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2023 was a challenging environment for active equity managers in Australia and persistence of outperformance was hard to find, largely in line with the results of prior years.
In comparison to equity managers, there was a higher degree of persistence in the outperformance of bond managers versus peers as well as benchmarks; however, more such results will need to be seen consistently over longer time periods to conclude the existence of genuine skill among bond managers.
- 20% of above-median funds in calendar year 2021 remained so in each of the two succeeding years. If outperformance were purely random, we would expect a 25% repeat rate.
- Of 2021’s top quartile equity funds, only 2% remained in the top quartile for each of the next two years (versus a 6.25% expectation under random distribution). The result was much better for bond funds, with 44% of the top quartile remaining in the top quartile for the next two years.
- Persistence of outperformance against benchmarks was rare: 196 out of a total 329 Australian Equity General funds outperformed the S&P/ASX 200 in calendar year 2021, and only 4 of those 196 winners—about 2%—managed to continue outperforming annually through December 2023.
To find out more information and download S&P Dow Jones Indices Australia Persistence Scorecard Year-End 2023 report please visit their webpage here.
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