Which were the least volatile global equity funds?
Despite not being among the best performers in the sector, the least volatile global equity funds managed solid returns built off the strong market performance of 2019, according to data.
According to FE Analytics, the least volatile global equity fund within the Australian Core Strategies universe was Talaria Global Equity Foundation Units which had a volatility of 6.27, followed by Zurich Investment Plan Managed Share (7.05), CFS Stewart Investors Wholesale Worldwide Sustainability (7.2), Vanguard Global Minimum Volatility (7.43) and Capital World Dividend Growers (7.69), over the year to 29 November, 2019.
The global equity sector returned an average of 21.01% over the same time period and had volatility of 9.76.
Only the Capital fund achieved a higher return than the sector average at 21.96%, while CFS returned 19.95%, Zurich at 17.05%, Talaria at 15.55% and Vanguard at 14.86%.
In its December quarterly update, Talaria said it was disingenuous to boast about their returns as 2019 saw strong returns everywhere.
“Assuming we are in a new era of higher stock prices and lower returns involves the risk of significant capital impairment,” it said.
“Likewise, thinking prices will fall at some point involves an opportunity cost of an uncertain amount – which as it happens in 2019 was near a 20-year high.”
Although they were not at the top of the sector and were below average, they believed smooth returns were all that mattered.
“Smoothing returns matters. Not being forced to sell at depressed prices matters. Preserving enough capital to fund retirement matters.”
“And perhaps most importantly – the fact that the route taken to wealth counts for long-term wellbeing more than the destination of wealth itself matters.
Performance of the least volatile global equity funds v sector over the year to 29 November 2019
AUTHOR
Chris Dastoor
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