26 months have now passed since the start of the COVID-19 induced equity correction and 24 months since the rally which followed. For those with short memories, February 2022 was the first of two consecutive months of negative returns for equity markets brought on by the uncertainty of COVID-19. It was a period that broke the markets out of multiple years of double digit equity market returns. Of course investors can remember better (and worse) times from history, but it was the first real correction since the GFC. The table below shows the returns for a number of major indices, and the multiple years of double digit returns, thanks to falling interest rates, and loose fiscal policy.
Souce: Australian Fund Monitors
The old adage of time in the market rather than timing the market has rung true once again over the past 2 years, with those willing to stay put reaping the rewards of a welcome, albeit volatile, recovery from a drawdown that saw investors in Australian Shares lose over a quarter of their capital.
The volatility over the past 2 years has shown that the majority of active managers have outperformed, with 119 out of 158 beating the ASX 200 Total Return Index from the start of February 2020 to the end of February 2022. The top 10 performers over the period had an average return of 23.6% versus the benchmark return of just 3.9%, and an average return for Active Australian Equity Managers on the fundmonitors.com database of 7.9%.
Of course, it’s not all smooth sailing, with the top 10 performing Active Long Only funds averaging a maximum drawdown of -30.9% versus the benchmark at -26.7% along with an average Standard Deviation of 27.5% versus the benchmark at 19.7%.
Top 10 Performing Australian Equity Managers – 1 Feb 2020 to 28 Feb 2022
Souce: Australian Fund Monitors
Meanwhile the Global Equity Benchmark fared much better since the start of the pandemic, with a total return of 8.6% and maximum drawdown of -13.2%. However, more than half of the Active Global Equity Managers on the FundMonitors.com database outperformed the benchmark, including some of the well publicised largest managers.
Top 10 Performing Global Equity Managers – 1 Feb 2020 to 28 Feb 2022
Souce: Australian Fund Monitors
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