Promising returns from specialist funds
Taking a niche approach to fund selection rather than opting for the standard Australian equities funds has paid off in the past year with the specialist equity sector returning more than 20% in the past year.
According to data from FE Analytics, within the Australian Core Strategies universe, the specialist equity sector returned 23.5% over one year and 9% over the past six months to 31 January, 2020.
This indicated that a willingness to look beyond the traditional realms of Australian equities and consider other areas, sometimes considered a riskier part of the market, could pay off for investors.
There were currently 30 different funds in the sector, which covered areas such as private equity, technology and healthcare.
The best-performing fund over one year to 31 January, 2019, was the ETFS Morningstar Global Technology ETF which returned more than 40% followed by BT Technology Retail which returned 38.7%.
Eight of the top 10 best performers in the sector focused on technology with funds covering areas such as cybersecurity and Asian technology companies. The two funds which were sat in other areas invested in Australian equities and industrials.
Of those funds that had a three-year track record, all reported better performance in the past year than they had over the annualised three years, indicating this was a stellar time for the sector. In some cases, performance markedly improved such as the BetaShares Australian Financials ETF which saw three-year annualised performance of 4.4% but reported returns of 18.5% in the past year.
In the whole sector, there was only one fund which failed to achieve double-digit returns over the past year – BetaShares Global Banks ETF Currency Hedged but this remained in positive territory with returns of 2.8%.
AUTHOR
Laura Dew
Recommended for you
Bennelong Funds Management has signed a memorandum of understanding with US private credit manager Monroe Capital to distribute its products in Australia.
Global equity manager Talaria Capital has appointed a Sydney-based sales director as it grows its distribution presence across Australia.
Global private markets firm Partners Group has launched an evergreen fund to provide Australian advisers with access to its cross-sector royalties strategy.
Franklin Templeton has reduced fees for two of its Brandywine fixed income funds and enacted a name change for its Global Income Optimiser fund.
