Financials underweight paves way for double-digit gains

6 November 2020
| By Laura Dew |
image
image
expand image

Of the Australian equity funds which have reported double-digit gains over the past year, a common denominator between them all is a significantly lower weighting to financials.

The top-performing funds in the Australian equity sector over one year to 30 September, 2020, according to FE Analytics, had a much lower weighting than the benchmark to financials and the big four banks, despite this making up a significant part of the Australia market.

Eight of Australia’s largest companies sat in the financial sector including the big four banks plus firms such as Suncorp and Macquarie Group.

Hyperion Australian Growth Companies had returned 19.3%, Bennelong Australian Companies returned 12.3%, Platypus Australian Equities Trust returned 11.6% and Bennelong Concentrated Australian Companies returned 10.3%.

The Australian equity sector lost 7.3% over the same period while the ASX 200 lost 10.9%.

When it came to their respective financial weightings, Hyperion and Bennelong Australian Companies both had 7% while Platypus and Bennelong Concentrated Australian Companies had an even smaller weighting at 5%. This compared to a 25.2% weighting by the ASX 300 benchmark. None of the funds had the big four banks in their top-five holdings.

The top-performing fund overall, Perennial Private to Public Opportunities, which returned 28.8% did not have its sector weightings available.

Shares in the big four banks had all underperformed the ASX 200 over one year to 4 November, 2020, with Commonwealth Bank losing 7.9% and Westpac losing the most at 35.9% versus losses by the index of 7.8%.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

GG

So shareholders lose a dividend plus have seen the erosion of value. Qantas decides to clawback remuneration from Alan ...

2 months 1 week ago
Denise Baker

This is why I left my last position. There was no interest in giving the client quality time, it was all about bumping ...

2 months 1 week ago
gonski

So the Hayne Royal Commission has left us with this. What a sad day for the financial planning industry. Clearly most ...

2 months 1 week ago

A Sydney-based financial adviser has been banned from providing financial services in the interest of consumer protection after failing to act on conduct concerns. ...

3 weeks 3 days ago

ASIC has cancelled the AFSL of a $250 million Sydney fund manager, one of two AFSL cancellations announced by the corporate regulator....

3 weeks 1 day ago

Having divested its advice business in August, AMP is undergoing restructuring in at least four other departments amid a cost simplification program....

2 weeks 5 days ago