Australian equity funds with an overweight to the consumer discretionary have outperformed peers since the start of the year as consumers hit the shops.
The ASX 200 Consumer Discretionary sector returned 9.3% in August and had returned 34% since the start of 2020.
IML Australia Share fund manager Daniel Moore said stores such as JB Hi-Fi had seen increased sales as a result of consumers spending super withdrawals or stimulus payments.
“The strong performance by the consumer discretionary sector was a bit of a surprise as consumers really splurged out with the super money they withdrew and from JobKeeper payments. We saw incredible results from stocks like JB Hi-Fi, Nick Scali and Harvey Norman, people bought a lot of flat screen TVs and sofas so it will be interesting to see how that goes in the future,” Moore said.
According to FE Analytics, within the Australian Core Strategies, there were five funds which had over 20% invested in the consumer discretionary and all of these had outperformed both the Aussie equity sector and the ASX 200.
The five funds were Bennelong Australian Equities, Lincoln Australian Growth Retail, Bennelong Concentrated Australian Equities, Bennelong Twenty20 Australian Equities and DDH Selector Australian Equities.
Bennelong Australian Equities, Lincoln Australian Growth Retail and DDH Selector Australian Equities all received a 5-Crown rating in the latest FE fundinfo Crown rebalance.
Since the start of the year to 31 August, the Aussie equity sector lost 6% while the worst performance by the five funds was a 3% loss and two had reported double-digit returns. The ASX 200 had lost 7.5% over the same period.
At the top, Bennelong Australian Equities returned 10.3% and Lincoln Australian Growth Retail returned 10.2%.
Bennelong Concentrated Australian Equities returned 7.2%, Bennelong Twenty20 Australian Equities returned 1.2% and DDH Selector Australian Equities was the only one to report a loss of 3.1%.
For the three Bennelong funds, consumer discretionary was their largest sector weighting compared to a 7.2% weighting by their ASX 300 benchmark.
