Which equity sectors are standing their ground?
Money Management, using FE Analytics, looked at the average performance of the 12 equity sectors in the Australian Core Strategies universe to see who’s maintained their position across the three years to 30 July, 2018.
For the three years to 30 July, the Asia Pacific Single Country and Equity Income sectors sat in the bottom decile with returns of 5.61 and 4.44 per cent, respectively.
At the other end of the spectrum in first position were Australian small/mid caps and North American equities with 13.50 per cent and 13.26 per cent returns, respectively.
Specialist equities, global equities and infrastructure equities sat in the third, fourth and fifth decile, and global small/mid caps, Australian equities and emerging markets sat in the sixth, seventh and eighth deciles.
The chart below shows the performance of the top six sectors for the three years to 30 July.
Fast-forward to the year to 30 July and some of the average performers have dropped to bottom position while others have managed to climb the ladder.
Infrastructure equities have dropped to bottom decile under the equity income sector, with returns of 5.44 per cent. This is not unsurprising though, as infrastructure assets tend to underperform in bull markets given their defensive nature.
Emerging markets have remained in the eighth decile and specialist equities dropped from third to sixth while Australian equities rose to fourth and global small/mid caps hit third.
Despite average returns of 19.51 per cent, Australian small/mid caps lost their top spot to North American equities, which returned a whopping 24.29 per cent for the year to 30 July.
The Asia Pacific ex Japan sector remains attractive despite a drop from second decile, and it still scraped a position in the top 50 per cent of sectors with returns of 13.77 per cent.
The chart below shows the performance of the top six sectors for the year to 30 July.
2018 has knocked Australian small/mid caps off their pedestal to sixth decile, with Australian equities climbing to equal top decile position with North American equities, although they lag with returns of 5.51 per cent as opposed to 10.42 per cent.
Global small/mid caps have retained their second decile position and infrastructure again looks attractive in fifth decile with returns of 4.46 per cent.
Asian equities and emerging markets echo trade tensions and look to be on a downward spiral with the Asia Pacific Single Country sector returning -2.29 per cent, the Asia Pacific ex Japan sector returning -2.57 per cent and emerging markets returning -2.70 per cent.
Recommended for you
High entry requirements are vital to ensure fund management remains competitive, according to Blackwattle’s managing director Michael Skinner, as the firm approaches its first anniversary.
Forager Funds Management has shared its rationale behind delisting its Australian Shares Fund from the ASX in favour of structuring it as an open-ended unit trust.
Michael Lovett, who left the investment giant just three months after launching its Vanguard Super offering, has taken up a CEO role at an Australian asset manager.
As fund managers look to enhance efficiencies and reduce operating expenses amid active underperformance, former abrdn managing director Brett Jollie shares how to successfully do so.
