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Financial Happenings Blog
Tuesday, April 03 2007

In the Australian Newpaper, in the Wednesday 'Wealth' section they publish 1 and 5 year returns for Australian managed funds.

The data makes interesting reading - and supports our use of indexing, and the use of Dimensional small and value funds.

The average annual return from Australian share funds to the 30th of March 2007 has been 14.25% a year.  The return from the Vanguard index fund has been 15.4% a year for the past 5 years - comfortably beating the average managed fund return.

There are 57 Australian share funds with 5 year returns listed in the newspaper.  The Vanguard index fund ranks 17th of the 57 funds.  (For clients - the Vanguard index fund and Dimensional large companies fund will have very similar performance).

The Dimensional Small company and Value companies trusts that we use have performed as we expected (or a little bit better).  The value company trust has returned 19.78% a year over the past 5 years and the small company trust 20.97% a year over the past 5 years. 

The results clearly support our investment philosophy.  Indexing is a powerful investment approach, systematically exposing portfolios to small and value trusts makes it even more effective!


Scott Francis

Posted by: Scott Francis AT 06:39 pm   |  Permalink   |  Email
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