Money Management has looked at the top-performing high-and-low-risk Australian equity funds in the Australian Core Strategy universe over the three years to 31 July to see whether high-volatility funds are in fact a risk worth taking.
Data from FE Analytics has shown that you don’t in fact need to invest in high-risk funds to get good returns, with the top performing fund in the sector running at a FE Risk Score of 109 – just a little higher than that of the S&P ASX 300 Index, which was 100.
To put this quantitatively, the volatility of the top fund, the Bennelong Concentrated Australian Equity fund, which returned 20.09 per cent, was 11.4 per cent, and the volatility of the ASX 300, which returned 8.08 per cent was 12.07 per cent.
The second-best fund in the sector was the SGH Australia Plus fund, which returned 16.94 per cent for the same time frame, and had a Risk Score of 90, making it less volatile than the index while bringing in more than double the returns.
The chart below shows the performance of the top two funds as compared to the ASX 300 for the three years to 31 July.
Four other funds sat in the top 10 in terms of performance and had below-average volatility, with Risk Scores ranging from 90 to 97, showing a split mix between above-...