Domestic bonds tops in Oz: Morningstar

Morningstar describes 2008 as the year most investors would prefer to forget. Multi-sector funds, the mainstay of many super funds took a hammering, and the Australian share market recorded its worst return in years, shedding 38.92% for the calendar year.

Active managers tended to outperform the index and most value managers were slightly more successful than growth managers. Outperform though, still meant funds posted big negative returns.

However there is some good news. Several funds which are promoted and used by New Zealand advisers have performed well, particularly with international shares. Boutique newcomer Magellan “had a stellar maiden year” managing to contain its losses to 2.65%, putting it at the top of Morningstar’s international equities league table.

The research house says that although it has a concentrated portfolio, there have been some good stock picks and it also had a large cash position. Another fund to get mention was Kerr Neilson’s Platinum International Fund which only fell 7.39% for the year.