When you place your money into a managed fund, you’re placing your trust in other people — but which funds deserve it?
Managed funds allow you to invest in multiple assets simultaneously. Yet once you have invested in the managed fund, how your money is spent is up to the fund manager.
While some managed funds are listed, the majority are not and it is more difficult to track how they perform.
But over time some fund managers perform better than others and here are the top seven performing managed funds in Australia.
A word of warning, we’re going to mention some specific managed funds but it shouldn’t be taken as an investment recommendation. If you’re in the market for a managed fund, please do research beyond this article and do not merely rely on past performance.
1. Perpetual Select Superannuation Plan (76 percent y.o.y)
As its name suggests, this managed fund is a superannuation fund. While a minimum $3,000 initial investment is required you can regularly contribute more.
The fund has returned 76 percent in the last twelve months, in spite of the downturn at the end of the last year. However, it has only gained eight per cent in 2019.
One might suggest the increased bullish sentiments in stock markets this year have led people to stocks instead of super funds — but this fund invests in stocks itself, among other assets.
It is also possible investors fear if Labor win the election, they will make changes that make investing in superannuation less generous.
2. ETFs Physical Palladium (51 percent y.o.y)
This fund is an Exchange Trade Commodity, meaning its a fund backed by a physical commodity. In this case, it is London Platinum and Palladium Association-compliant palladium held by HSBC.
While most commodity trading is done through futures, governments and banks do hold physical metals, especially gold, to protect themselves from financial crises such as inflation.
Palladium is a rarer metal than gold but just as useful, being utilised in watches, dentistry equipment and jewellery.
In the last year, spot palladium prices have increased by 42 per cent and this fund has exceeded this growth, up 51 percent year on year.
3. Duxton Water (47 percent y.o.y)
Water’s been in the news lately, and safe to say it’s becoming a precious commodity.
Unlike the others on this list, Duxton Water (ASX: D2O) is listed on the ASX. But that is not all that is unique about Duxton.
Duxton provides Water Entitlement leases to agriculture producers.
As its name suggests, water entitlements provide holders with a share of water from a total resource (a ‘consumptive pool’). In the first instance they are allocated by the government although these can be transferred privately or temporarily leased.
Duxton Water grants shareholders regular dividends from lease payments it receives. Because it is publicly listed, shareholders also have the benefit of being able to trade their holdings faster than non-listed funds.
4. Zurich Investments Global Thematic Share Fund (31 percent y.oy)
Run by Swiss-based insurer Zurich, in conjunction with Lazard, this fund invests in equities globally, targeting long term growth.
It aims for returns regardless of market conditions, seeking opportunities even in poor times. It can be held hedged or unhedged and requires a minimum investment of $5,000.
Arguably much of its performance can be attributed to its largest holding, Microsoft, making up 1.8 per cent at last update.
While the majority of its holdings are US-based it does not seem to have a sector it concentrates investments in with no one industry making up over 13 per cent of its portfolio.
5. Macquarie Pension Plan – Property Securities Fund (29 percent y.o.y)
This fund is run by Macquarie and invests in real estate investment trusts (REITs).
REITs in their own right work like listed funds except they invest in individual properties and pool the earnings into one fund.
The index it’s seeking to outperform is the S&P/ASX 200 Property Trust accumulation — which despite its name it does not track the ASX 200, rather all ASX-listed REITs.
This fund, like its peers, also pays dividends.
The fund has performed despite the significant downturn Australia’s property market has seen in the last several months.
6. MFF Capital Investments (27 percent y.o.y)
MFF Capital Investments (ASX: MFF) is another listed exchange company. It is owned by the Magellan Group and they invest in Australian and international shares.
MFF invests in global equities focusing on businesses ‘assessed to have attractive business characteristics, at a discount to their assessed intrinsic values’.
It is easy to track this fund because it is publicly listed and it has grown from $2.40 in late April last year to $2.93 now.
7. UBS Property Securities Fund (26 percent y.o.y)
Requiring a minimum investment of $20,000, this fund is clearly aimed at high net worth individuals.
This fund also invests in Real Estate Investment Trusts (REITs) and pays quarterly distributions.
Unlike other REIT-targeting funds we have covered, its target index is the S&P/ASX 300 property Accumulation Index over rolling five year periods. It has also been more open about what they invest in with its holdings including Mirvac and Charter Hall Group.
Curiously, this fund does not charge a performance fee, just a management fee (of 0.85 per cent).
With a return of 26 per cent in the last twelve months, this fund probably deserves to.
The funds at a glance
|Fund||Price per unit (29 April)||1 year return|
|Perpetual Select Superannuation Plan||$68.89||77%|
|ETFs Physical Palladium||$183.89||51%|
|Zurich Investments Wholesale Global Thematic Fund||$1.09||31%|
|Macquarie Pension Plan||$5.11||29%|
|MFF Capital Investments||$2.93||27%|
|UBS Property Securities Fund||$1.29||26%|
Source: Bloomberg, individual product disclosure statements (PDS)
This content does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.
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