The Lonsec Global Equities Sector Review found that 25 new global equity products had been brought to market during the year to March 2016, a trend that shows “no immediate signs of abating”, according to Lonsec general manager of equities, Peter Green.
“There are a number of possible drivers of this activity, including attractive past returns from the sector, waning domestic market performance, and a general push for greater portfolio diversification,” he said.
Lonsec noted that investors are struggling to meet return targets in the current low-growth, low-yield environment, and added that global equities may be seen as a way of diversifying a portfolio while simultaneously improving returns.
The research house also noted that growth equities were the best performing peer group within the study, returning -1.7 per cent for the year, with small cap equities performing the worst for the year at -6.4 per cent, though they “remained dominant” over three- and seven-year periods.
A significant proportion of growth products, 69 per cent, have also outperformed their benchmark over a one-year period, up from 50 per cent over seven years, and 75 per cent for both the three- and five-year periods.
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