Money Management looked at the volatility of the FE five-Crown rated funds in the Australian equities sector to see which funds have been giving investors the smoothest ride.
The ACS Equities – Australian sector had a cumulative volatility of 10.01 per cent over five years, and 10.39 per cent over three years.
The CI Brunswick fund has a cumulative volatility over a period of five years of 7.82 per cent, and 8.4 per cent over three years. The fund also managed to achieve a top-quartile maximum drawdown in nine years of the past decade, best protecting investor capital in the sector.
It’s clear when looking at the fund’s portfolio, it’s low volatility could be explained by investments in stalwarts and bond like equities, which are less-volatile in nature.
The Lazard Australian Diversified Income Fund had a cumulative volatility of 8.56 per cent over five years, and 8.6 per cent over three years, and managed to remain less risk than the sector from 2014 onwards.
The Ganes Focused Value fund was less volatile than the sector at 8.58 per cent over five years, but proved more risky in the short-term, exceeding the sector in 2016 and 2017.
The Lazard Australian Diversified Income Fund proved slightly more risky than the sector in 2013, while CI Brunswick fund remained less volatile than the sector over the entire five-year period.
The chart below shows the volatility of the funds compared...