International equities going the distance
Money Management, using FE Analytics, has looked at the international equity funds with a 15-year track record to see who has impressed investors with returns above the sector average.
Only 15 international equity funds, that is, funds in the Australian Core Strategies Universe sitting in the Asia Pacific ex Japan, Asia Pacific Single Country, Europe and North America sectors, have a track record of greater than 15 years.
The funds are dominated by big managers like Platinum, BlackRock, Cooper Investors, Schroders, Maple-Brown Abbott and Pendal.
In the Asia Pacific ex Japan sector, Platinum Asia, CI Australian Equities (which was placed in the Asia Pacific ex Japan sector for its exposure to New Zealand equities), Schroder Asia Pacific and Maple-Brown Abbott were the top four funds whose average performance across 15 years sat above the sector’s average.
The Asia Pacific ex Japan equity sector produced average returns of 11.36 per cent across 15 years to July 30, with only two top-quartile return periods and three bottom-quartile return periods.
Despite four of 15 years with below-the-line returns, one of which was the year of the global financial crisis, Platinum’s $2 billion Asia fund has managed to produce, on average, yearly returns of 15.76 per cent.
The three FE Crown-rated fund, headed up by Joseph Lai since 2011, spent four years in the top quartile, and only one in the bottom quartile.
It invests primarily in financials (24.30 per cent), telecom, media and technology (19.30 per cent), the money market (15.70 per cent) and basic materials (13.70 per cent.
It’s top ten holdings consist of Alibaba.com, Samsung Electronics Co and four Asian banks.
CI Australian Equities has produced average returns across 15 years of 13.07 per cent and produced negative returns in only two years, spending nine years in the top quartile and three in the bottom quartile.
Schroder’s Asia Pacific fund and Maple-Brown Abbott’s Asian Investment Trust fund produced average returns of 11.93 per cent and 11.69 per cent respectively, with an equal average quartile-ranking of 2.26.
The chart below tracks the performance of the funds as compared to the ACS – Asia Pacific ex Japan sector for the 15 years to date.
Platinum’s Japan fund smashed the Asia Pacific Single Country sector average of 9.09 per cent across 15 years with returns of 14.11 per cent, with four periods in the top quartile.
It also spent three periods in the third quartile and four in the bottom quartile, suggesting its returns are quite volatile.
Platinum’s European and Pendal’s European Share funds both managed to outperform the European equity sector average of 9.05, with average returns of 12.24 per cent and 9.06 per cent respectively.
The chart below shows the performance of the funds as compared to the ACS – Europe sector across the 15 years to date.
Only BlackRock’s iShares S&P Small Cap ETF has managed to outperform the North American equity sector average of 10.90 per cent with returns of 12.91 per cent. Pendal’s American Share sat just under the sector average, producing average returns of 9.82 per cent.
The chart below shows the performance of the funds against the ACS – North America sector for the 15 years to date.
AUTHOR
Anastasia Santoreneos
Recommended for you
A leading consultancy believes asset managers will be reluctant to expand overseas in 2025 as high distribution costs blow out potential benefits, but this is providing tailwinds for Australian third-party distributors.
Three of the largest ETF providers reported net inflow increases of more than 100 per cent during 2024, as Betashares admits it “underestimated” the scale of annual inflows the industry would see.
As Magellan Financial Group continues its search for a permanent chief financial officer, it has looked internally for an interim replacement.
Bennelong Funds Management has announced its first responsible entity service client, having flagged it as a 2025 priority for the firm.
