Global SMIDs lag behind larger equities
Despite the top performers in the global equities sector seeing sizeable gains in the first half of the year, global small/mid caps haven’t seen the same success at the top, with only three funds posting positive returns for H1 2020.
This was in contrast to the broader global equities sector, which had over 50 funds deliver positive results in the same timeframe.
According to FE Analytics, within the Australian core strategies (ACS) universe, the global small/mid cap sector had lost an average of 6.51% for H1 2020.
The best-performing funds were WCM International Small Cap Growth (10.24%), Ophir Global Opportunity (5.87%), Cambridge Global Smaller Companies (1.07%), Bell Global Emerging Companies (-0.87%) and Prime Value Emerging Opportunities (0.96%).
The WCM was a truly global fund with its highest regional holdings in Japan, which counted for one fifth of its regional weightings.
Its other top regional weightings were Sweden (10%), Australia and the UK (9% each), and Switzerland and Canada (7% each); only 1% of the fund was held in US equities.
In its market commentary, Ophir said June was a fitting end to an “unforgettable” financial year.
“The current level of volatility is not uncommon as economies enter recessionary environments and we expect it to continue over the next few months as the world balances several countervailing forces,” it said.
“The next six months will be a fascinating time as the world navigates towards 2021, which we can only hope will be better than the first half of 2020.
“As always, our process focuses on finding cash generative businesses with structural or secular growth opportunities and strong balance sheets that trade on reasonable valuations.”
Despite the lack of performance in the sector, Ned Bell, Bell Asset Management chief investment officer (CIO), had previously said that history showed it was the perfect time to invest in the sector.
Best-performing ACS global small/mid cap funds since the start of the year to 30 June 2020
AUTHOR
Chris Dastoor
Recommended for you
Clime Investment Management has faced shareholder backlash around “unsatisfactory” financial results and is enacting cost reductions to return the business to profitability by Q1 2025.
Amid a growing appetite for alternatives, investment executives have shared questions advisers should consider when selecting a private markets product compared to their listed counterparts.
Chief executive Maria Lykouras is set to exit JBWere as the bank confirms it is “evolving” its operations for high-net-worth clients.
Bennelong Funds Management chief executive John Burke has told Money Management that the firm is seeking to invest in boutiques in two specific asset classes as it identifies gaps in its product range.
