Gale Force Winds for the Index Unaware
The competition is tough. Our Australian Shares Fund has returned 34% over the last 12 months. According to Morningstar, that ranked the Fund just 7th out of 24 in its category. And that’s a year in which the main index, the All Ordinaries Index, returned just 14% including dividends. When it comes to international shares, the opposite has been true. Our International Shares Fund has outperformed the index by just 4.8% over the past year, yet that ranks it 10th out of 204 global funds Morningstar deems to be similar. Over three years, we are less than 1% ahead, yet Morningstar ranks the three-year performance 11th out of 176 funds. Aussie fund managers might all be geniuses, but that seems unlikely. Rather, it might pay to look at the indexes themselves rather than the fund managers. The fact that large caps have dramatically underperformed has been a huge tailwind in Australia. Internationally, their outperformance has been a headwind. In this blog post, we explain why that means you should close your ears to fund manager bragging (VIEW LINK)
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Steve began Forager Funds in 2009, and now manages approximately $470m across two funds. Offering a listed Australian Shares Fund (FOR) and an unlisted International Shares Fund, Steve focuses on long-term investing in undervalued companies.