Best Australian Share Funds
Investors are spoilt for choice when looking for a strong performer
There is always a big list of winners and placegetters in the Australian share funds category, giving investors an array of top funds from which to choose.
Greencape Broadcap, a joint winner last year, has done it again this year. “Greencape's thorough fundamental process results in a growth-leaning portfolio particularly notable for its structural inclusion of smallcap stocks,” says Morningstar analyst Andrew Miles in a September 2018 report. “Typically small-cap stocks make up 6% to 9% of the portfolio versus about 3% to 5% for the average Australian equities manager covered by Morningstar.
“Greencape Broadcap continues to reign supreme in its sector because of an outstanding investment team and thoughtful approach,” says Miles. “Portfolio manager Matthew Ryland is an excellent investor and has managed this strategy expertly since inception [in 2006]. Ryland works closely with talented co-founder David Pace and three high-calibre analysts.”
Miles says Greencape's shrewd team, diligent research and nimble size “give us confidence they'll stay ahead of the chasing pack”. But he adds that “one small blemish” is the cost, which is higher than average.
The Lazard Select Australian Equity W Cl fund is joint winner. This fund has “a high-conviction, benchmark-unaware and concentrated portfolio of 12 to 30 stocks, mostly liquid large caps with a smattering of names outside the top 100,” says Morningstar analyst Alexander Prineas in an October 2018 report.
Sector allocations are combined into Lazard's four economic themes: short cycle; long cycle; interest-rate sensitive; and consumer-related.
“Lazard Select Australian Equity's concentrated value portfolio can be volatile but for long-term investors it's a commendable strategy,” says Prineas. “A disciplined team and process make this a standout for investors with a long time horizon.”
Once again the only blemish is the annual fee, 1.15% but there's no performance fee.
The funds were selected from those highest rated by research houses Morningstar (excluding mortgage funds), Zenith Investment Partners and Lonsec. For the Mortgage Fund and Property Securities awards SQM Research joined the panel. To qualify, each fund had to be open to new investment with a minimum initial investment of $25,000 or less. Funds were ranked using a points system based on their rating by each research house. A further filtering process was then applied. Performance data is as at September 30, 2018. No winning fund or placegetter charges an entry fee.