FUNDS run by Perpetual have ranked the best and third-best-performing Australian share funds for 2012.

The latest fund performance survey by Mercer shows the Perpetual Ethical Fund is the best-performing Australian fund, with a return of almost 40 per cent over 2012.

The BlackRock Equitised Long Short Fund comes in second with a return of just over 30.6 per cent, and Perpetual's Share Plus Fund takes out third spot with 30.1 per cent.

Australian shares had a good year in 2012 with the market, as measured by the ASX/S&P 300 index, including dividends, up by 19.7 per cent. Healthcare was the best-performing sector, with a return of 47.5 per cent followed, by telecoms with a return of 42.1 per cent.

The latest Mercer survey confirms just how difficult it is for funds to consistently outperform the market. The median-performing Australian shares fund returned 20.3 per cent. That is an outperformance of the market by 0.6 percentage points. With an investment management fee of about 1 per cent, from the investor's point of view the typical fund is about 0.4 percentage points under the market return.

Fund managers have been launching new styles of funds. Income-oriented funds - with a bias towards shares paying higher dividend yields - produced a return of 23.6 per cent during 2012. The performance reflects the good performance of high-dividend shares as investors chase yield.

The principal at Mercer, David Carruthers, said the average manager, after fees, was pretty close to matching the market.