With December being traditionally one of the strongest months for equity investors, Money Management has taken a closer look at for which Australian equity funds the Santa rally effect worked best in the past by analysing the performance of the Australian equity funds in December of 2016, 2017 and 2018.
According to the FE Analytics, there was only one fund across the Australian equities universe that delivered a consistent performance in the last month of the year over the last three years.
Ellerston Australian Share, with returns of 0.08%, 3.55% and 19.49% in December 2018, 2017 and 2016, respectively, was the only fund that sat in the first quartile of its peer group consistently when analysing the returns for the last month of the year for the past three years.
According to Fidelity International, which looked at the past 27 years of monthly returns of the S&P/ASX200, December was identified as the second-best performing month in the year, with an average return of 2.0% over the month.
In addition, 20 of the last 26 December months have seen the Australian equity market rise, with December 1993 generating a +8.2% return.
However, Fidelity found last year’s December was the first month since 2012 when S&P/ASX200 monthly returns were negative (-0.4%) by comparison, the sector returned 1.6% and 4.1% in the last month of the year in 2017 and 2016, respectively.
Interestingly, the worst month for...