Do Aussie small companies have a leg up on their global peers?
With statistics showing fund managers are making the move to international stocks, Money Management used FE Analytics to see whether Australian small/mid caps have a leg up on global small/mid caps, and if it’s actually worth staying on home soil.
Funds are starting to allocate a higher percentage of their portfolio to international equities for their diversification benefits, but data from FE Analytics shows the top Aussie small/mid caps are well ahead of their global counterparts.
For the year to date, the Perennial Value Microcap Opportunities Trust was the top performing fund with returns of 45.78 per cent – a massive step ahead of the top global small/mid cap, Bell Global Emerging Companies, which returned 25.58 per cent for the same period.
The Perennial fund’s top holdings included Paragon Care, Doray Minerals, Clover Corp, Austin Engineering and IMDEX Ltd. For the year to date, the fund more than doubled its benchmark, the S&P ASX Small Ordinaries, which returned 20.32 per cent.
The Bell Global Emerging Companies fund, while a top performing fund in the sector is rated one Crown, and while the companies it invests in are not disclosed, it has a heavy weighting to health care and consumer products as well as industrials, telecom, media and technologies.
It has still managed to outperform its benchmark, the MSCI AC World SMID Cap index, which returned 17.88 per cent for the year to date.
Macquarie and Fidelity also feature as top Aussie small/mid cap managers, with Macquarie’s Small Companies fund and Fidelity’s Future Leaders fund placing in the top five funds of the sector.
Macquarie Small Companies returned 28.97 per cent for the year to date, and also has a pretty long track record of delivering high returns with top quartile performances for the three years, five years and ten years to date.
Fidelity Future Leaders returned 28.74 per cent for the year to date and posts a similar track record of high returns across the three, five and ten years to date.
In fact, the top global small/mid cap fund ranks equally to the 17th Aussie small/mid cap fund, showing perhaps there really is no place like home.
The chart below tracks the performance of the S&P ASX Small Ordinaries as compared to the MSCI AC World SMID Cap index for the three years to date.
AUTHOR
Anastasia Santoreneos
Recommended for you
The FSC has announced 15 proposals ahead of the federal election which it hopes will increase the competitiveness of Australia’s financial services sector, including six with a focus on fund managers.
Regal Funds Management saw total net inflows of $2.1 billion during 2024, with flows primarily going into long/short equities and multistrategy vehicles.
There is growing divergence between institutional and retail investors in their enthusiasm towards equities, according to Bank of America, with retail sentiment being “unusually low” at the start of 2025.
A new co-portfolio manager has joined Tyndall Asset Management to help strengthen the performance of its small companies portfolio.
