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Printed: 10 December 2022 8:30 PM

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18 Nov 2022 - Hedge Clippings |18 November 2022
By: FundMonitors.com

    

Hedge Clippings | Friday, 18 November 2022

As we glide, slide or stagger towards the last few weeks of what will go down as a pretty forgettable year (unless you are Anthony Albanese who continues his dream start as PM) it is worth considering that thanks to a recent rally, the Australian equity market has performed well against its US equivalent.  Australian managed funds - although as a whole positive in October - have found it a difficult year as well, with the average equity based fund on the FundMonitors.com data base down 11.31% over 12 months to the end of October, vs. a fall of just 2.01% for the ASX200 total return index.

Over the same 12 months (based on 88% of the results to date) only 16% of equity funds managed to outperform the ASX 200, which will no doubt be taken as welcome news by the fans of index or passive funds. However, we believe that misses the point - namely that just as the performance of individual stocks within the index varies, so too will the performance of managed funds. The key, depending on one's strategy or objective, is to select the outperformers.

For instance, over 12 months the performance of the Top 10 funds has ranged from 19.8% through to 43.7%, while over 3 years the range has been 17.97% to 44.67% per annum. Over 5 years the number drops, but the best performing fund - Glenmore Australian Equities - returned 19% pa. followed by Regal's Small Companies Fund at 18.25% and with Bennelong's Emerging Companies Fund in third place at 17.41%.

Consistency is not always easy to achieve: Of the Top 10 funds over 5 years, only 5 funds were positive over 1, 2, 3 and 4 years as well (Glenmore, Samuel Terry, Regal Amazon, GQC Global, and Australian Eagle's Long Short Fund) which probably underlines how difficult 2022 has been, particularly in the small cap space. Added to the variability of returns has been the rise - and fall - of crypto funds, which took out 3 of the Top 10 spots over 2 and 3 years, but to the surprise of no one, take out 5 places among the 10 worst performing funds over 1 year.

When it comes to investing in managed funds, success is a combination of careful research and diversification.

 


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