S&P Global’s recent findings highlight persistent challenges for active fund managers, revealing that over two-thirds of Australian and global managers lagged their benchmarks over one year, with a vast majority underperforming across 15 years. This trend underscores an immense and often unacknowledged mental strain on individuals managing client funds. Amidst volatile market conditions, the pressure to consistently outperform and maintain client confidence creates significant psychological demands.
The role is further complicated by factors such as index concentration and the pressures of running a business in a competitive industry. Brisbane-based investment manager Hyperion, which creates and manages investment portfolios, recently demonstrated these challenges. Its Australian fund was down 15 per cent last year and a further 25 per cent this year, with its global fund trailing by 11 per cent over 12 months. Hyperion has responded by making significant portfolio adjustments, reducing software exposure due to AI disruption and acquiring mining stocks like BHP. This strategic shift reflects a long-term view that AI infrastructure will drive demand for key resources.
Former Fidelity fund manager Anthony Bolton advised maintaining conviction with flexibility and avoiding rigid investment stances, acknowledging that underperformance is often unavoidable. While strategic adjustments are vital, addressing the psychological toll is equally crucial. A psychologist noted that fund managers often “internalise failure” due to relentless self-imposed standards, leading to significant personal burden and guilt. In acute situations, professional clinical help, often via a mental health plan initiated through a general practitioner, is essential to navigate the profound stress inherent in this changing sector.
