According to an InterSec release with preliminary data, the median manager in its non-US equity peer group universe (with about 50% of managers reporting) returned 20.02% for 2004. This comes off of a record 2003, the company said.
The benchmark MSCI EAFE index neatly split the field coming in just barely above the median at 20.24%, the data showed. Manager returns reported so far range widely from 32.5% to 9.5%. Last year was the first year since 1998 that the median manager underperformed the index, so if this preliminary number holds, it would be the first two-year period where money managers underperformed the benchmark.
Managers who underperformed usually had trouble selecting stocks in the European and Japanese markets, with performances up 20.9% and 15.8% respectively. The other half of managers tended to benefit by allocations to emerging markets, which were up 25.6% for the year and not included in the EAFE index, InterSec said.
In the InterSecpreliminaryemerging markets peer group, managers continued to shine against the MSCI EMF emerging markets benchmark, returning 27.8% and besting the index by 2.2% for the year. Manager returns ranged from 40.4% to 14.4%, the InterSec data showed.
InterStock selection in South Africa and Asia helped drive the performance past the index. In fact, the median South Africa performance was a whopping 59.3% versus the index return of 44.9%. Unfortunately, it appears that most managers under-weighted South Africa an average of 5.5%, the InterSec announcement said.