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.
Recommended for you
There is one specific risk that is a significantly higher concern for financial services directors compared to companies overall and is impacting their risk appetite, according to the AICD.
Global fund managers are shunning bonds, with the asset class seeing the largest drop in allocations in more than 20 years.
Australian Ethical has seen its funds under management reach $10 billion, driven by organic customer growth and superannuation contributions.
Financial advisers will have access to private equity investments run by WTW for the first time as it launches a pooled fund to provide savers with access to traditionally institutional assets.
