Which Aussie small-cap funds have consistently outperformed?

26 June 2020
| By Laura Dew |
image
image
expand image

After S&P Dow Jones announced the Australian equity mid and small cap sector was the most consistent sector over three years, Money Management took a deep dive into individual fund performance.

In its research, the ratings provider found 29.4% of funds in this sector which outperformed their benchmark in 2017, consistently outperformed in the subsequent two years to 31 December, 2019. This compared to 15.8% of funds across all Australian equity categories.

The benchmark used by the ratings agency was S&P/ASX Mid Small Cap index. Looking at latest data, this index returned 18.9% between 01 June, 2017 to 31 May, 2018, 2.7% between 01 June, 2018 to 31 May, 2019 and lost 1.9% between 01 June, 2019 to 31 May, 2020.

According to FE Analytics, there were 51 funds, within the Australian Core Strategies (ACS) universe, in the Australian equity small/mid cap sector which beat that index in 2017/18. Some 22 funds of these then beat the index in 2018/19 and a further 16 beat it in 2019/20 as well.

This means, out of the 85 funds which had been launched in June 2017, some 16 had consistently beaten the benchmark since then, representing 18% of funds in the ACS sector.

These funds were 8IP Australian Small Companies, Alpha Australian Small Companies, Ausbil MicroCap, CFS Colonial First State Wholesale Australian Small Companies, CFS FirstChoice Wholesale Australian Small Companies, Eley Griffiths Emerging Companies, Fairview Equity Partners Emerging Companies, Fidelity Future Leaders, Flinders Emerging Companies, Macquarie Australian Emerging Companies, OC Micro-Cap, Ophir Opportunities, Pendal MicroCap Opportunities, Perennial Value Microcap Opportunities Trust, UBS Australian Small Companies and UBS Microcap.

Between June 2017/18, the best performer was Perennial Value Microcap Opportunities Trust which returned 61.7% versus index returns of 18.9%. Between June 2018/19, SGH Emerging Companies returned 15.6% versus index returns of 2.7% (although this fund did not outperform the following year). Lastly, between June 2019/20, Ophir Opportunities returned 15.5% compared to losses by the index of 1.9%.

The best-performing fund over all three years to 31 May, 2020 was Perennial Value Microcap Opportunities Trust which returned 91% versus returns of 19.2% by the S&P/ASX Mid Small index. The wider Australian equity small/mid cap sector had returned 23% over the three-year period.

Performance of Perennial Value Microcap Opportunities Trust versus S&P ASX Mid Small index over three years to 31 May 2020.

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