Was 2019 better for Australian or global small/mid cap funds?
The Australian and global small/mid cap sectors both had similar returns for 2019, however the Australian sector had a greater disparity between the best and worst performers.
According to data from FE Analytics, within the Australian Core Strategies universe, the global small/mid cap sector returned 24.59%, while the Australia small/mid cap sector returned 24.45%, over the year to 31 December, 2019.
The best performing in the global sector were Fairlight Global Small & Mid Cap A (36.76%), Ellerston Global Mid Small Unhedged (36.04%), THB International Micro Cap W (31.99%), Prime Value
Emerging Opportunities (31.81%) and Lazard Global Small Caps I (28.44%).
The best performers in the Australian sector were Bennelong Emerging Companies (86.65%), Australian Ethical Emerging Companies Wholesale (45.66%), SGH Emerging Companies Professional Investors (43.89%), Ophir Opportunities Ordinary (43.46%) and Fairview Equity Partners Emerging Companies (43.13%).
In its end of year performance update, Bennelong said future returns were almost certainly not going to be as good as they were in 2019.
“Micro and small-cap investing can deliver larger returns but comes with far greater risk. This greater risk means typically more volatility, larger drawdowns and a higher chance of loss,” it said.
And although many funds in the sector delivered great returns for 2019, they said small-mid cap sectors still needed to be viewed over the long-term.
“Focusing just on the recent good returns is a poor guide to the longer-term performance,” it said.
“That all said, we manage the portfolio with a risk-conscious approach and we believe the fund can produce decent returns over the journey for those willing to stay on for the ride.”
Australia v global small/mid cap sectors performance over the year to 31 December 2019
AUTHOR
Chris Dastoor
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.
