Mercer Australian Shares Fund aims to exceed the benchmark, before management costs, over the medium to long term. The Fund provides exposure to the Australian share market utilising an actively managed, multi-manager approach.
Australian shares were positive over Q2 2023 as the S&P/ASX 300 Index returned 1.0% for the period. The S&P/ASX Mid 50 Accumulation Index was the strongest segment of the market, returning 4.6% over the quarter. On the flipside, the S&P/ASX Small Ordinaries was the weakest of the local indices at – 0.5%. Best performing sectors were Information Technology and Utilities, while weakest sectors were Healthcare and Materials. The largest positive contributors to index returns were Xero, James Hardie and Woodside. On the other hand, significant detractors were BHP, CSL and NAB.
What is Mercer Australian Shares Mercer Australian Shares is an Managed Funds investment product that is benchmarked against ASX Index 200 Index and sits inside the Domestic Equity - Multi-Manager Index. Think of a benchmark as a standard where investment performance can be measured. Typically, market indices like the ASX200 and market-segment stock indexes are used for this purpose. The Mercer Australian Shares has Assets Under Management of 619.00 M with a management fee of 0.77%, a performance fee of 0.00% and a buy/sell spread fee of 0.77%.
How has the investment product performed recently? The recent investment performance of the investment product shows that the Mercer Australian Shares has returned 3.12% in the last month. The previous three years have returned 7.98% annualised and 13.74% each year since inception, which is when the Mercer Australian Shares first started.
How is risk measured in this investment product? There are many ways that the risk of an investment product can be measured, and each measurement provides a different insight into the risk present. They can be used on their own or together to perform a risk assessment before investing, but when comparing investments, it is common to compare like for like risk measurements to determine which investment holds the most risk. Since Mercer Australian Shares first started, the Sharpe ratio is NA with an annualised volatility of 13.74%. The maximum drawdown of the investment product in the last 12 months is -4.35% and -44.53% since inception. The maximum drawdown is defined as the high-to-low decline of an investment during a particular time period.
What is the relative performance of the investment product? Relative performance is what an asset achieves over a period of time compared to similar investments or its peers. Relative return is a measure of the asset's performance compared to the return to the other investment. The Mercer Australian Shares has a 12-month excess return when compared to the Domestic Equity - Multi-Manager Index of 2.2% and -0.92% since inception.
Does the investment product produce Alpha over its Peers? Alpha is an investing term used to measure an investment's outperformance relative to a market benchmark or peer investment. Alpha describes the excess return generated when compared to peer investment. Mercer Australian Shares has produced Alpha over the Domestic Equity - Multi-Manager Index of NA% in the last 12 months and NA% since inception.
What are similar investment products? For a full list of investment products in the Domestic Equity - Multi-Manager Index category, you can click here for the Peer Investment Report.
What level of diversification will Mercer Australian Shares provide? Mercer Australian Shares has a correlation coefficient of 0.97 and a beta of 1.03 when compared to the Domestic Equity - Multi-Manager Index. Correlation measures how similarly two investments move in relation to one another. This establishes a 'correlation coefficient', which has a value between -1.0 and +1.0. A 100% correlation between two investments means that the correlation coefficient is +1. Beta in investments measures how much the price moves relative to the broader market over a period of time. If the investment moves more than the broader market, it has a beta above 1.0. If it moves less than the broader market, then the beta is less than 1.0. Investments with a high beta tend to carry more risk but have the potential to deliver higher returns.
How do I compare the investment product with its peers? For a full quantitative report on Mercer Australian Shares and its peer investments, you can click here for the Peer Investment Report.
How do I compare the Mercer Australian Shares with the ASX Index 200 Index? For a full quantitative report on Mercer Australian Shares compared to the ASX Index 200 Index, you can click here.
Can I sort and compare the Mercer Australian Shares to do my own analysis? To sort and compare the Mercer Australian Shares financial metrics, please refer to the table above.
Has the Mercer Australian Shares been independently verified by SMSF Mate? This investment product is in the process of being independently verified by SMSF Mate. Once we have verified the investment product, you will be able to find more information here.
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Comments from SMSF Mates SMSF Mate does not receive commissions or kickbacks from the Mercer Australian Shares. All data and commentary for this fund is provided free of charge for our readers general information.
Performance Commentary - March 31, 2023 Risk asset returns were mixed over March, whilst defensive assets delivered gains as markets digested financial sector developments in the US and Europe.
Financial distress at a California-based regional bank culminated in the second biggest US bank failure in history. Two other regional banks also went into administration. Outside the US, investors digested UBS’s takeover of Credit Suisse and subsequent turmoil in bond markets. Swiss authorities let Credit Suisse’s riskiest bonds be wiped out, while equity holders received a small amount of equity in UBS as part of the transaction. While these issues were seen as idiosyncratic and largely driven by poor management of individual banks, there is a
pattern of weaker businesses struggling amid high interest rates and declining market liquidity. Employment and activity data continued to be resilient in the US with signs of recovery emerging from the UK and Europe. Inflation in the US continued to trend down. However, inflation fell by less than expected in the Eurozone and rose in the UK. Central banks consequently hiked rates by 25 bps in the US / Eurozone and 50 bps in the UK.
Over March, Hedged Developed Markets Overseas Shares returned 2.5%, most sectors posted positive returns, although financials sold off strongly amid the banking turmoil. Cyclical areas of the market such as small-caps and energy also struggled.
Performance Commentary - December 31, 2022 The fund underperformed the benchmark over the quarter by 1.0% as both stock selection and asset allocation had a negative contribution. Overweight positions in James Hardie and ResMed alongside an underweight to Fortescue Metals were the major detractors from performance. This was partially offset by overweights to Origin Energy, Fisher & Paykel, and Qantas, which contributed to performance over the quarter. From an asset allocation perspective, an overweight to health care and an underweight to financials detracted from performance, while an underweights to consumer staples and an overweight to energy contributed.
Performance Commentary - September 30, 2022 Australian shares were positive over the quarter as the S&P/ASX 300 Index returned 0.5% for the period. The S&P/ASX Mid 50 Accumulation Index was the strongest performer for the quarter returning 5.2%, while the S&P/ASX Small Ordinaries was the weakest performer, returning -0.5%. The best performing sectors were Energy and Healthcare, while the weakest performing sectors were Utilities and Real Estate. The largest positive contributors to the return of the index were Pilbara Minerals, CSL and Whitehaven Coal. On the other hand, the most significant detractors from performance were BHP, Transurban and Macquarie Group.
Performance Commentary - June 30, 2022 During the second quarter of 2022, the fund underperformed the index by 0.5%. Australian equities declined across the board over the quarter, amid concerns over rising interest rates and downside risks to economic growth. The sudden hiking of interest rates by the RBA in light of rampaging inflation saw a widespread repricing of risk across asset classes. Sector allocation in the fund mostly had a neutral impact on excess returns with an overweight to financials and an under weight to resources being the most significant positive contributors while an underweight to industrials being the most significant detractor. Security selection had a negative impact over the quarter. Overweight holdings in QBE Insurance Group and Medibank Private were the most significant contributors while an underweight to Transurban Group and an overweight in Sims Ltd detracted from performance.
Performance Commentary - March 31, 2022 During the quarter both stock selection and asset allocation detracted from performance. Underweight positions in Woodside Petroleum and Westpac, and an overweight position in Aristocrat Leisure were key drivers of underperformance. This was partially offset by overweight holdings in Santos and IGO which both contributed positively. From an asset allocation perspective, overweight exposure to consumer discretionary and communications services sectors detracted, while overweight exposure to the energy sector and underweight exposure to real estate contributed positively to performance.
Performance Commentary - June 30, 2021 During the quarter stock selection marginally detracted from performance, whilst asset allocation had a slight contribution to positive excess returns. Stock selection within both the industrial and materials sectors detracted from performance, driven by overweight allocations to Qantas and Oz Minerals. Stock selection within the healthcare sector was positive, driven by an overweight exposure to ResMed. The overweight allocation to communication services also contributed positively for the quarter, as did underweight allocations to utilities and materials.
Performance Commentary - December 31, 2020 During the quarter stock selection contributed towards positive performance, whilst asset allocation detracted. Utilities (UW) and industrials (OW) were the key drivers of outperformance over the quarter, however an underweight position in consumer discretionary and information technology names were the key detractors for the quarter as growth names outperformed. Overweight holdings of both Qantas and Virgin Money were the key drivers of positive performance along with an underweight position in ASX Limited. Despite this and underweight allocation to Afterpay Limited did detract overall.
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