Australian equity funds dodging the decade’s market falls
The CI Brunswick and Alpha Australian Blue Chip funds have the best track record in protecting investors during market downturns in the Australian equities sector.
Money Management analysed the ACS Equity - Australia funds that boast some of the sector’s lowest drawdowns in each of the past 10 calendar years to find which fund protected investor capital best.
Of all the funds in the sector with a ten-year track record, only the two mentioned above have achieved top-quartile maximum drawdowns in nine years of the past decade and only slipped into the second quartile in one year.
Of the two, CI Brunswick made the highest total cumulative return in the ten years to the end of 2017 after gaining 147.84 per cent; this compares with 47.59 per cent from the average ACS Equity – Australia member.
The fund is built around a concentrated portfolio of between 20 and 40 stocks that have been selected by Cooper Investors’ Australian, Asian and global investment teams. At least three-quarters of assets will be held in Australian and New Zealand stocks, with current top holdings including ALE Property Group, Clydesdale and ASX Limited.
As the chart above shows, CI Brunswick has a strong track record in posting a lower maximum drawdown than its average peer. From the past ten full years, 2009 was the only time it performed worse than the sector for this metric.
The $50.7 million Alpha Australian Blue Chip fund is another that in the top quartile for drawdowns in nine of the past ten years.
It is designed for investors seeking strong medium to long-term capital growth from higher market capitalisation Australian shares. As its name suggests, the fund offers predominantly large market capitalisation Australian equities, with current top holdings being CSL, BWX and Aristocrat Leisure.
Over the ten years looked at in this article, the fund made a 76.44 per cent total return and comfortably outperformed its average peer. The one year the fund slipped into the second quartile for maximum returns was 2012, when it was down 5.8 per cent.
Other ACS Equity – Australia funds that have consistently achieved some of the sector’s best annual maximum drawdowns in the past 10 years include Perpetual Pure Value Share, Antares High Growth Shares Professional and Perpetual Wholesale Concentrated Equity.
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