Surveying 90 large (over $1 billion of assets) Australian super funds, the ISN study fund a strong performance persistence over the two four-year periods it mapped.
Of the 30 funds in the top third in the second period, 16 (over half) came from the top third in the first period and only three came from the bottom third. Of those in the bottom third in the second period, 15 (half) were bottom third previously, whereas only six were in the top third, the report says.
... The reason persistence is stronger among larger funds is that persistent differences in performance are due to differences in governance and profit orientation, and these differences increase with scale...
Not surprisingly, the ISN is pushing the case for its own members and the results should be seen in the context of the increasingly bitter battle between the Australian union-based 'industry' funds and the rival retail funds sector.
In this case, past performance is a reliable guide to the future: the two sectors will continue sniping at each other forever.
It's most unlikely, however, that the investment past-performance cow has stopped mooing its old warning just yet.
