Hedge Clippings | Friday, 06 August 2021
Over the past few weeks Hedge Clippings has been trying to avoid COVID-19, both literally and as a subject matter. There's not much more that can be said, other than 'everyone is over it', but we're still all up to our armpits in it. And for those in or around lockdown there's not much that can be suggested other than to keep safe, get tested, and above all get the jab.
We're thankful we never considered a career in politics.
And if we think we're in trouble, take a look elsewhere: 210.7 million cases worldwide and 4.28 million deaths. And before we start complaining about how badly we're handling the current outbreak and lockdown, consider this: In the UK there has been 1 case of Covid for every 11 people, and one death for every 525. Out of 220 countries, that puts them in equal 28th and 33rd place respectively.
In the USA the numbers are similar - 1 case for every 9 people, 1 death for every 527. Equal 11th and 36th.
Australia, even with the current crisis, is way down the list. Even with 308 new cases, we have 1 case for every 723 people and 1 death for every 27,677. That puts us at position 180 and 190 respectively.
If it doesn't sound too glib, we're also doing well in the Olympics, at the other end of the rankings. At present we're a credible 4th overall, but on a per capita basis we're right up there. We don't usually crow about our sporting prowess, we'd rather just sit back,enjoy it, and congratulate the achievements (and behaviour) of every athlete who even made it to Tokyo.
Normally, of course, we're looking at fund performances, not medical or sporting statistics. So this week we took a deep dive into the average performance of a peer group of Australian and Global "Long Only" funds over the last 3 years to 30 June 2021. Instead of pulling out the top performers individually, we reviewed the performance based on the length of their track record.
We've done this before but once again it reinforces the point: The best performance comes from managers with a track record of less than 5 years, who returned on average 14.9% per annum over the past 3 years, followed by 13.58% for those with a 6-8 years track record, after which it flattens out to around 11%, and then dropped to 10% for managers with a track record of more than 20 years.
However, given the bias in some investment committees towards managers with a longer track record (and sometimes with good reason) early stage managers are worth including in many portfolios.
News & Insights
Have Emerging Market Funds Passed Their Used-By Date?: Part II by Premium China Funds Management
The Long and The Short: The running of the bull by Kardinia Capital, a Bennelong boutique
How REA Group became the great Aussie multi-decade compounder by Chris Demasi, Montaka Global Investments