Tech still king in North America
The North American equities sector rebounded strongly in 2019 with tech stocks still making up the top holdings of the best performers.
The sector was one of the best performing for the year returning 31.27%, according to data from FE Analytics within the Australian Core Strategies universe.
The BetaShares Geared US Equity Currency Hedged was the best in the sector returning 69.01%, year to 31 December, 2019.
This was followed by BetaShares NASDAQ 100 ETF (38.77%), VanEck Vectors Morningstar Wide Moat ETF (34.89), Pendal American Share (32.75%), UBS IQ MSCI USA Ethical ETF (31.38%).
The success of the BetaShares Geared fund didn’t come without volatility (24.48), which was double that of the sector average (12.01).
The next highest was THB US Micro Cap (15.32; returned 12.02% which was the lowest in the sector) and BetaShares NASDAQ 100 (13.3).
One of the smaller sectors, the North American equities sector had only 11 funds – two managed funds and nine exchange traded funds (ETFs).
For risk-adjusted returns the BetaShares NASDAQ fund had a Sharpe ratio of 2.77, followed by Pendal (2.76), SSgA SPDR S&P 500 ETF Trust AUD (2.76; returned 31.29%), VanEck (2.68), BetaShares Geared US and UBS (2.64).
In its final fact sheet of the year Pendal said 2019 was a strong year for equities, with the S&P 500 rallying from a poor end to 2018.
“Most of the return this year was due to robust rise in prices rather than earnings growth, or in other words, multiple expansion,” it said.
“Throughout much of the year, lower volatility stocks significantly outperformed, with value stocks a notable laggard.
“A shift from defensively oriented stocks and towards deeper cyclicals started in mid-September, driven by three rate cuts, improving economic conditions and an easing of trade war concerns.”
The BetaShares Geared fund’s top holdings were Apple (4.6%), Microsoft (4.5%), Amazon (2.9%), Facebook (1.8%) and Berkshire Hathaway (1.7%), as of 31 December, 2019.
The BetaShares NASDAQ fund’s top holdings were Apple (11.6%), Microsoft (10.7%), Amazon (8.1%), Facebook (4.4%) and Alphabet (4.1%).
VanEck’s top holdings were Bristol-Myers Squibb (2.71%), Biogen (2.69%), Intel (2.63%), Nike (2.62%) and Microchip Technology (2.61%).
Pendal’s top holdings were Microsoft (5.12%), Alphabet (3.66%), Amazon (3.57%), Mastercard (2.69%) and Facebook (2.45%), as of 30 November, 2019.
UBS’ top holdings were Apple (4.8%), Microsoft (4.1%), Amazon (2.8%), Facebook (1.8%) and JP Morgan Chase (1.6%), as of 31 December, 2019.
Best performing North American equity funds v sector over the year to 31 December 2019
AUTHOR
Chris Dastoor
Recommended for you
Bell Financial Group has appointed a chief investment officer who joins the firm from Clime Investment Management.
Private markets funds with “unattractive practices” could find themselves facing enforcement activity with ASIC chair Joe Longo stating he cannot rule it out in the future.
Despite ASIC concerns about private credit funds being accessed via the advised channel, there are questions regarding how high its usage actually is among financial advisers.
Challenger has looked to the superannuation industry for its appointment of a group chief investment officer, a newly-created role.
