Before the mid-1960’s there was neither a generally accepted way to calculate a total return, nor a way to compare the returns of different funds. However, from the mid-1960's onwards investors could calculate returns on a consistent basis and compare returns with those achieved elsewhere.

The results are all the same for all equity styles and are also compelling with other asset classes such as fixed interest and property securities.

Upon hearing these findings, investors often respond that they are not concerned with the results of the average manager. Investors plan on hiring the above-average managers.

However, the research is clear again, managers with good track records are no more likely to have good records in the future than are managers with poor track records. Whilst not endorsing a pure index approach, index funds with lower management fees and low turnover costs always seem to rank highly in long term performance studies.

Records in Australia, published in the journal of the Securities Institute of Australia (JASSA Issue 4 – Summer 2000) provides evidence that Australian investment managers are unable to add value above passive strategies. These findings are consistent with previous studies conducted in Australia and also in the US, UK and Japan. The research findings in all these countries send a clear message: active management has lower returns than would be expected from passive management.