The most extraordinary year for financial markets in living memory was a good one for active equity fund managers, particularly those who were wary of economic risk before COVID-19 struck and also took the opportunity to add structural-growth and cyclic exposures after the sell-off.

Passive funds made subpar returns in the year to the end of December as the S&P/ASX 300 fell 1.2 per cent and dividends were crimped by a combination of recession and the regulation of banking sector payouts. But the top 10 active equity funds returned 24 per cent on average, according to Mercer’s closely watched Australian Shares Investment Manager Performance Survey released on Tuesday.