The bulk of Australian equity funds beat the index through the 12 months to January, according to new data from Australian Fund Monitors.
The statistics captured by research hub Australian Fund Monitors showed 79 of the 97 long-only Australian equity funds beat the index through the year to January, with all but 11 beating the index during the last three years.
Around 23 Australian equity funds lost more than 25 per cent in March last year, but 18 of those funds went on to record an outperformance over the index over 12 months.
For the 20 top performers, the average up-capture ratio, which measures funds’ cumulative performance during the market’s positive months, was 193.6 – far above the threshold of 100 indicating outperformance.
The ASX 200 Total Return Index recorded its largest single monthly fall in 10 years during March 2020, when it fell by 20.65 per cent, following its 7.96 per cent drop the month before, the third-largest fall in the decade.
Despite the volatility, the index bounced back with its largest single-month gains in 10 years during April by 8.78 per cent, and again in November by 10.21 per cent.
The ASX 200 Total Return Index ended up falling by 3.11 per cent over the 12 months.
Meanwhile AFM’s Global Equity Index had a 10-year record monthly loss in March 2020 of 8.07 per cent, following its 5.57 per cent fall in February. It also bounced back in April and saw a strong performance in November.
Global funds found the going more difficult, with 36 of 53 funds outperforming in the global market (68 per cent). But one-third of the funds that outperformed in the last 12 months failed to beat the benchmark in the previous three years.
Many global funds (33) had underperformed in March, with 22 of these funds going on to outperform over the full year.
Unlike their Australian equity counterparts, most global peers were noted to have made gains during the negative months for markets. The average down-capture ratio for the 15 best performing global funds was 43.4 – showing the funds fell less than half as much as the index when markets took a downturn.
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