Terrible October lived up to its reputation and the market correction saw Australian broad-cap funds slide, with only two passive funds managing to stay above the line.
Wealth Within’s chief analyst, Dale Gillham, said the All Ordinaries Index fell around 4.5 per cent as heavy sell-offs of US tech stocks rippled through to the Australian market.
The only funds to rally during the month were the BetaShares’ Australian Equities Strong Bear Hedged and BetaShares’ Australian Equities Bear Hedged, which returned 15.58 per cent and 6.56 per cent in the month.
The funds aim to help investors profit from, or protect against, a declining Australian share market, and seek to generate magnified returns that are negatively correlated to the returns of the share market (as measured by the S&P ASX 200), so it’s no surprise they outperformed.
While the negative returns produced by all other funds in the sector didn’t significantly affect their long-term performance, the leader board for the year to last month’s end has slightly changed, with Sandon Capital Activist sitting high with returns of 16.90 per cent.
DDH Selector Australian Equities is still in the top five, returning 14.94 per cent for the year to last month’s end, and Lincoln Australian Growth was similarly a stalwart, returning 14.22 per cent.
Gillham said the energy sector was hit the hardest, which was down 8.5 per cent, IT was down 6.1 per cent and consumer...