Australian small and mid-cap equities had the highest percentage of 5 Crown rated funds in this latest edition of FE fundinfo’s Crown Ratings, representing 17% of the sector and significantly beating their global counterparts.
There were 14 funds in this sector which had a 5 Crown rating compared to just two for the global small and mid-cap sector. The total was also double the number of Australian large-cap equity funds which received a 5 Crown rating.
This was a reversal of the previous edition of Crowns in September when global small and mid-caps had the largest percentage of 5 Crown funds from any sector at 13%.
The Australian small and mid cap figure represented 17% of the sector, up from 11% in the last edition, and it also saw five funds upgraded plus one fund which debuted with 5 Crowns.
The five funds which were upgraded were SGH Emerging Companies, UBS Microcap, Pendal MicroCap Opportunities, Macquarie Australian Emerging Companies and DMP Australian Small Caps Trust, while Bennelong Emerging Companies was a new entrant.
Small cap funds performed well during the pandemic but it had been a very stock-specific performance due to the riskier nature of their investments compared to large caps. For Australian large cap equities, just one fund (Australian Ethical Australian Shares) was upgraded to 5 Crowns and only seven received a 5 Crown rating this year, some 3.8% of the sector.
In the global small and mid-cap space, just two funds received a 5 Crown rating, representing 5.7% of the sector, which were Bell Global Emerging Companies and Prime Value Emerging Opportunities and both retained their previous rating. The third 5 Crown fund from the last issue Ellerston Global Mid Small Unhedged fund was downgraded to 4 Crowns.
The largest total volume belonged to the global sector at 26 funds but this represented a smaller percentage at 13% of the total sector. The majority of these also retained their 5 Crown rating from the previous edition, with five being upgraded and one being a new entrant.