Knowledge@ASB: Investment Returns: How Active Fund Managers Lost Their Lustre

Australian investors are asking if it’s worth paying more for active funds management. The average Australian equity fund manager only marginally outperformed the market in the last financial year, and recent market volatility has highlighted some costly issues. With higher fees and capital gains tax to take into account, active managers are not so attractive after all. Past performance is not a reliable indicator for the future. And research shows the difficulty in picking successful managers for different markets. But investors are not alone in the confusion – financial advisers are also struggling.