AUSTRALIA - The Commonwealth Superannuation Scheme (CSS) achieved an 8.4% return in the six months to year-end 2005, but was unable to match the benchmark return of 9.4%.
CSS chief investment officer Andre Morony said most of that difference was down to the impact of taxation on the pension fund. “On a pre-tax basis, the fund return for the six months to the end of December was 9.2%, or 0.2% below benchmark.”
The fund’s performance relative to benchmark was also negatively impacted by under-performance from managers within Australian equities, property and international bonds, added Morony.
“This just offset the positive contribution to relative returns from managers within international equities and market neutral hedge fund managers.”
The CSS, which allocates 29% to Australian equities, achieved a six month return to end December of 13.9% in this asset class, below the benchmark return of 14.3%.
In December, global equities rose strongly by 2.2% in local currency terms, with the strongest gains achieved in Japan (up 8%) and some European markets (up 4%).
That strong performance resulted in global equities rising by 12% in the six months to December. The strongest advances were achieved by Japan (39%), Switzerland (21%) and Germany (18%), while the Australian market rose by 14%, buoyed by large gains within the materials and energy sectors.
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