From the Blog

Index Funds vs Fund Managers – Small Caps Funds Managers Win

Regal’s small caps fund has achieved 103pc return in it’s first 12 months since inception in January 2015.  The key contributors of the past year have been positions in Bellamy’s Australia, BWX Limited, and Aconex.  The fund can also short stocks and invests outside the top 100 ASX stocks.  Research for short selling is just as rigorous as taking a long position.  Similar to Bennelong’s Long Short Equity Fund strategy, although Bennelong’s strategy is more a ‘binary’ approach.  Since its inception in 2002, the Bennelong Long Short Equity Fund strategy headed by Richard Fish and Sam Shepard has returned investors 10 times their money, compared to about two times for the broader sharemarket. Bennelong Capital ~ AFR Nov 15

In 2013 from SMH the comparisons between active managers and the indices were done over periods of one year, three years and five years. The scorecard for active fund managers operating in the top 200 Australian shares index showed that 74 per cent of them outperformed the index over the past 12 months, but for the three and five-year periods the index outperformed more than 60 per cent of active fund managers.

When it came to the managers investing in the small companies, a very different picture emerged. In this situation the index was outperformed by 94 per cent of active fund managers over a 12-month period, and by 88 per cent over a three-year period and 82 per cent over a five-year period.  Does this mean that P A Fishers ‘scuttlebut’ travels a bit futher with small caps?  Those fund managers who do pay attention to small caps might get a bit more info from company management than the larger cap stock management are prepared to disclose?