Aus mid-, small-caps top relative performance

 — 1 minute read

The majority of Australian funds saw a downturn in their performance in 2018 compared to the year before, with many failing to outperform their index benchmarks with the exception of local mid- and small-cap funds, according to Dow Jones.

The S&P Dow Jones Indices Versus Active Funds (SPIVA) Australia scorecard for 2018 found that although mid and small-cap funds delivered a better benchmark relative performance than large-cap equity funds, the category suffered the highest liquidation rate at 8.5 per cent.

The S&P research showed underperformance for the majority of Australian active funds in most categories over the longer periods (five, 10 and 15 years).


Around 51.0 per cent of mid- and small-caps underperformed on an absolute basis, 45.7 per cent on a risk-adjusted basis, giving mid- and small-caps the lowest underperformance rate of any category.

Australian equity mid and small-cap funds recorded losses of 7.9 per cent and 6.95 per cent on equal and asset-weighted bases respectively, while the S&P/ASX Mid-Small dropped 7.98 per cent.

Australian equity general funds suffered drawdowns of 6.2 per cent and 5.8 per cent on equal and asset-weighted bases respectively compared to the S&P/ASX200 recording a loss of 2.8 per cent.

“Over the 10-year period, more than half of Australia’s equity mid- and small-cap funds outperformed the S&P/ASX Mid-Small,” Priscilla Luk, managing director and head of Global Index Research & Design, APAC at S&P Dow Jones Indices said.

“Companies with smaller market capitalizations tend to be less researched and generate more alpha opportunities for the mid- and small-cap fund managers.”

Around 86.7 per cent of Australian equity general funds underperformed the benchmark on an absolute and risk-adjusted basis.

International equity general funds posted an average loss of 0.5 per cent, with 70.4 per cent of funds underperforming the benchmark.

Australian bond funds gained 3.2 per cent and 3.4 per cent on an equal and asset-weighted basis, respectively as the SP

Australian equity A-REIT funds posted returns of 0.03 per cent and 0.79 per cent on an equal and asset-weighted basis respectively while the S&P/ASX 200 A-REIT gained 2.91 per cent, with less than a quarter of the funds outperforming the benchmark.



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Aus mid-, small-caps top relative performance
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Sarah Simpkins

Sarah Simpkins

Sarah Simpkins is a journalist at Momentum Media, reporting primarily on banking, financial services and wealth. 

Prior to joining the team in 2018, Sarah worked in trade media and produced stories for a current affairs program on community radio. 

You can contact her on [email protected].


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