Growth funds tracked by Intech returned a median 14.1 per cent for calendar 2006 and median 15.1 per cent for calendar 2004-06, the best result since 1991-93 and driven by strong equity and property markets.
Australian shares enjoyed a stellar 2006 return of 24.2 per cent, with Australian small caps outperforming the 50 leaders, recording 34 per cent against 23 per cent. International property securities yielded 39 per cent on a fully hedged basis, while Australian Listed Property Trusts (LPTs) returned 34 per cent. Australian bonds returned 3.1 per cent, the third time in the past four years the asset class has underperformed cash (6 per cent). Intech found the Legg Mason Growth fund was the best performer in 2006 with 17.3 per cent, ahead of AMP Balanced Growth at 16.3 per cent and Invesco with 16 per cent. The top quartile threshold for 2006 was 14.9 per cent. For the three top performing funds, it was the third consecutive calendar year in which their returns surpassed the top quartile figure. Yet Andrew Korbel, a senior consultant at Intech, warned consistent performance could not generally be expected over the longer term, and said that of the top five performing funds in the three years up to December 2003, only one, Suncorp, was listed in the top quartile for the next three years. Intech found the worst performing growth fund in 2006 was Perpetual’s with 12.2 per cent return, followed by BlackRock (ex-Merrill Lynch) with 12.3 per cent and MLC Moderate, which posted 12.5 per cent.
The brunt of losses from the LA wildfires are expected to be borne by primary insurers and high-risk reinsurance programs, but super funds are nevertheless closely monitoring the possible impact of the fires on catastrophe bond and insurance-linked securities exposures.
Simon HoyleJanuary 17, 2025
