Aussie stocks lead the fund performance tables in March
Australian equity funds generated strong returns in March while global share markets were rocked by Russia’s ongoing conflict with Ukraine, FE Analytics data shows.
Last month, the three best-performing sectors in the Australian Core Strategies universe all focused their investments in the domestic stockmarket, putting them in contrast to global equity strategies.
The average fund in the ACS Equity Australia Geared sector made a total return of 9.3% in March, followed by ACS Equity Australia (up 5.3%) and ACS Equity Australia Equity Income (up 5.2%). ACS Equity Australia Small/Mid Cap was close behind, sitting in fifth place with an average return of 3.6%.
However, the average fund in the ACS Equity Global sector was down 1.6% in March as investors became more cautious on risk assets following the invasion of Ukraine and the international community imposing a series of hard-hitting sanctions on Russia.
The worst performance last month came from the ACS Equity Emerging Markets sector, as exposure to Russia and China (where a ‘Zero Covid’ policy is prompting fresh lockdowns) contributed to an average loss of 5.1%.
Asia-Pacific and European equity funds also posted losses in March, as did bond funds after the Federal Reserve raised interest rates for the first time since 2018 in a bid to tackle soaring inflation.
The highest-returning individual fund was Ausbil Australian Geared Equity, which made 17.1% in March. Over five years, it was up 117.9% and sat in the first quartile of the ACS Equity Australia Geared sector.
The fund was overweight areas such as materials, energy and financials. The first two had outperformed in recent months on the back of post-pandemic supply bottlenecks and the sanctions on Russia, while banks were natural beneficiaries of rising interest rates.
Some 16 of the 25 highest-returning funds focused on the domestic market.
The other obvious trend was the strong performance of ACS Commodity & Energy funds, which made strong returns from the soaring price of commodities after Russia – a major exporter of many key industrial and agricultural raw materials – was frozen out of international trade.
AUTHOR
Gary Jackson
Recommended for you
Australian fund managers are actively seeking to launch Cayman versions of their funds to attract offshore flows, with Regal Partners set to launch its latest offering this month.
As private markets gain traction in Australia but only a limited pool of talent is available, three recruiters explore whether fund managers should consider looking overseas to find top talent.
With an explosion of private credit managers appearing in the market, two alternatives experts believe a consolidation is needed to maintain the quality of the sector.
Bentham Asset Management has become the latest fund manager to expand its distribution team as it reports increased interest in its credit strategies.
