Big Aussie equity funds disappointing investors
Money Management, using FE Analytics, has looked at the Australian equity funds with over $500 million in funds under management (FUM) in the Australian Core Strategies universe to see which funds are sitting in the third and bottom quartiles.
The ACS Equity – Australia sector returned an average of 7.53 per cent for the three years to 31 July 2018, placing it in the third quartile as compared to its funds.
The biggest underperforming fund was IML Australian Share’s fund, which has $2.8 billion in FUM, and produced sub-sector-average returns of 6.74 per cent for the same period.
The second-largest underperformer was BlackRock’s iShares Core S&P/ASX 200 ETF, with $1.1 billion in FUM and returns of 7.46 per cent.
The Advance Australian Shares Index fund was the only other fund with FUM above $1 billion that performed poorly but managed to return slightly above the sector average with returns of 7.59 per cent.
The chart below shows the performance of the big funds for the three years to 31 July as compared to the sector average.
The worst performers were the UBS Australian Share fund and the Yarra Australian Equities fund, which both sat in the bottom quartile with returns of 3.33 per cent and 5.86 per cent respectively, and FUM of $693 million and $588 million respectively.
Other bottom quartile funds were AMP Capital’s Equity fund and Montgomery Investment Management’s the Montgomery fund, which returned 5.64 per cent and 6.01 per cent with FUM of $574 million and $667 million respectively.
Conversely, some funds under $100 million have proven size doesn’t matter, and secured top quartile spots for the three years to 31 July.
The SGH Australia Plus fund has performed the best of the funds under $100 million, with returns of 16.94 per cent and only $8.7 million in FUM.
The smallest fund in the top quartile is the Macquarie Australian Equities fund, with FUM of $3.7 million and returns of 13.71 per cent, followed by the DDH Selector Australian Equities fund, which has $4.8 million in FUM and returned 16.31 per cent.
The chart below shows the performance of the smallest and best-performing funds as compared to the sector average for the three years to 31 July.
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