A co-conspirator shared with us the latest Columbia Threadneedle Fund Watch data and, unless you manage Japanese equities, it might be best to look away now.
Japan was the market where active managers were most likely to earn their gold embossed corn over the past quarter, with 11 per cent of active managers delivering top quartile performance for three consecutive 12 month periods to the end of March this year.
Japanese equity funds certainly have had a greater opportunity to outperform the index due to the idiosyncratic nature of the governance and structure of many companies there.
That came in a quarter where a total of only 38 of 1,425 actively managed funds delivered top quartile returns over that time period - or 2.5 per cent. With eight of these being Japanese equity funds, this means more than 20 per cent of outperformers were Japan funds.
When the hurdle rate is lowered to funds that have delivered above the median return rises to a hardly inspiring 18 per cent.
Another sector which provided a boost for active management’s case was UK smaller companies, where 22 per cent beat the median.
Perhaps the least surprising news since the new of the Pope being Catholic is that the US equity market was the one where the fewest managers could even beat the median, with just 10 from 139 funds beating that target.
Adam Norris, part of the multi-manager team at Columbia Threadneedle which compiled the data said: “Consistency was remarkably, well, consistent between quarters, despite the large rally in equity markets.
"Once again, Japan was a rich hunting ground for solid fund performance mainly driven by corporate reforms continuing to unlock shareholder value within Japanese equities. Interestingly, with US equities comprising ever larger parts of global portfolios, it is disappointing to see a lack of consistent US equity funds.”
