Financials underweight paves way for double-digit gains
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%.
AUTHOR
Laura Dew
Recommended for you
Tribeca Investment Partners has made a distribution hire from Australian Ethical in a newly-created role focused on the national intermediary market.
Asset managers may be urged to diversify their product ranges, but investment executives have warned any M&A deal should avoid simply filling gaps and instead consider long-term value creation.
Specialist wealth platform provider Mason Stevens has become the latest target of an acquisition as it enters a binding agreement with a leading Sydney-based private equity firm.
Fund managers are entering 2025 with the most bullish sentiment since August 2021 and record high allocations to US equities, thanks to the incoming Trump administration.
