Australian Small/Mid Caps is Crown Ratings’ best performing sector
The ACS Equity Australian Small/Mid Caps is Australia’s strongest performing sector according to the FE Crown Ratings, recording the greatest proportion of funds with the top five-crown rank.
The top 10 per cent of funds in the industry are awarded five FE Crowns, reflecting superior performance in terms of stockpicking, consistency and risk control. The next 15 per cent receive four Crowns and each of the remaining three quartiles will be given three, two and one crown(s) respectively.
Within the sector, 37.3 per cent of funds, or 28 of its 75 members to be eligible for a rating, received five crowns. Considering only the top 10 per cent of funds in Australia are awarded five FE Crowns, this placed it far above the average across all sectors.
SGH Emerging Companies was the highest returning five-crown fund within the sector, recording annualised returns of 28.99 per cent over the last three years. It was also highly volatile however, with three-year accumulative volatility of 10.93 per cent as at 31 October, 2017. This made it the third most volatile fund in the sector.
Cromwell Phoenix Opportunities, in contrast, delivered both high returns while recording relatively stable growth. It was the ninth highest performing fund of the Australian Small/Mid Caps over the last three years, while also being the least volatile.
BT Wholesale MicroCap Opportunities, OC Dynamic Equity and Smallco Investment delivered similarly impressive results, all receiving five FE Crowns at the same time as being amongst the least volatile in the sector.
Perpetual, Investors Mutual Limited and OC were the most successful fund managers for scooping crowns, each having three funds receive five FE Crowns within the Australian Small/Mid Caps sector.
The sector was also heavy with funds awarded four FE Crowns, with 29.3 per cent of Australian Small/Mid Cap funds receiving the second highest rating. This is almost double the overall average of four-crown funds across all Australian-managed funds, which sits at 15 per cent.
The proportion of funds receiving the bottom rating of one FE crown was far less for Australian Small/Mid Caps compared to other sectors. Only 12 per cent were hit with a one-crown rating, compared with 25 per cent across the entire funds universe.
Recommended for you
There is one specific risk that is a significantly higher concern for financial services directors compared to companies overall and is impacting their risk appetite, according to the AICD.
Global fund managers are shunning bonds, with the asset class seeing the largest drop in allocations in more than 20 years.
Australian Ethical has seen its funds under management reach $10 billion, driven by organic customer growth and superannuation contributions.
Financial advisers will have access to private equity investments run by WTW for the first time as it launches a pooled fund to provide savers with access to traditionally institutional assets.
