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SQM Research Newsletter and Ratings Update - June 2021

Our Research Service provides Ratings, Sector Reviews, Fund Research & Quantitative Analysis for over 10,000 funds. For more information, Visit us today! 

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SQM Rated Funds 
How Have they Done Over the Year?

by Rob da Silva, Head of Research

We take a look at funds across all asset classes that have an SQM rating and check in on their performance. The analysis covers the 12 months to May-2021.
 
That period excludes the COVID-crash and has been very rewarding for investors in pretty much all asset classes. Gigantic, fast-tracked fiscal and monetary stimulus have turbo-charged market returns across the globe. The attitude of governments and central banks to pending economic catastrophe has essentially been – save the patient, use ALL the treatments (FDA approved or not), worry about the side-effects later (or maybe not at all?).
 
How strong has it been? In many cases, these last 12 months rank in the top 10% or better of all observations going back multiple decades (except for cash and fixed income of course).
 
Let’s do the rounds:
 
(BTW-each graph that follows has 3 coloured lines representing maximum, median, and minimum)
Australian Equities
Australian Small Caps
Cash 
Rock bottom and not going up anytime soon 
Commodities
Huge surge in last 6 months 
Australian Fixed Income 
Negative for the year! 
Global Fixed Income
Scraping along the bottom (+ limited prospects)
International Equities Unhedged 
Strong numbers but not outrageously out of the ordinary
International Equities Hedged 
2nd highest in more than three decades!
International Small Caps
Running hard
A-REITs
Strong but not spectacular
Global Infrastructure 
Looks like it has more room
G-REITs 
A bit above median
So, risk assets have been the place to be and active managers have, by and large, done pretty well.
 
Funds rated by SQM have put in healthy performances on average as the table and chart below shows.
SQM Rated Funds vs. Markets
Finally, alpha-generation has tended to be well correlated with ratings. The chart below shows an upward-sloping relationship between SQM ratings and alpha over the last 12 months. In other words, higher rated funds tend to do better, on average, than lower rated funds.
A similar pattern holds for 3 years….
….and 5 years
SQM Research - Recently Published Sector Reports
May-21
SQM Research - Recently Rated Published Reports
May-21
SQM Research - Top 5 Rated Funds Ranked by 1 Year Total Return
May-21
SQM Research - Top 50 ETFs Ranked by 1 Year Total Return
May-21
SQM Research - Market Benchmarks
May-21
SQM Research - Discontinued or Not Renewed
May-21
Important Note:
In order to view our rating reports you must be subscribed to SQM Research Ratings research. Click HERE to subscribe

If you thought this piece was interesting and would like to see more, sign up for the Ratings Newsletter:
 
https://sqmresearch.com.au/funds/newsletter.php 
 
There is some great reading in our archives – check it out at:
 
https://sqmresearch.com.au/funds/newsletterarchive.php
For further information:
Rob da Silva - Head of Research, SQM Research
Tel: (02) 9220 4606
Email: rob@sqmresearch.com.au

Louis Christopher - Managing Director, SQM Research
Tel: (02) 9220 4666
Email: louis@sqmresearch.com.au

Matt Hattersley - Head of Dealer Group Subscriptions, SQM Research
Tel: (02) 9220 4602
Email: matthew@sqmresearch.com.au

Peter Evans - Account Manager, SQM Research
Tel: (02) 9220 4667
Email: peter@sqmresearch.com.au
 
About SQM Research
SQM Research is an investment research house that specialises in providing fund ratings, fund research, investment and property data to financial institutions professionals and investors.
For more information please visit www.sqmresearch.com.au
 
Research Methodology
Please see below for descriptions of each star rating, whose purpose is to act as a guide for dealer group research teams and investment committee:
4.5 stars and above - Outstanding. Highly suitable for inclusion on APLs.
4.25 stars - Superior. Suitable for inclusion on most APLs.
4 stars - Superior. Suitable for inclusion on most APLs.
3.75 stars - Favourable. Consider for APL inclusion.
3.5 stars - Acceptable. Consider for APL inclusion.
3.25 stars - Caution required. Not suitable for APLs.
3 stars - Strong caution required. Not suitable for APLs.
Below 3 stars – Avoid or redeem. Not suitable for APLs.
Hold - Rating is suspended until SQM Research receives further information.
Withdrawn - Rating no longer applies.

* The definitions above are not all-encompassing. Not all individual items mentioned will necessarily be relevant to the rated Fund. Users should read the current a comprehensive assessment.
Disclaimer
The rating contained in this document is issued by SQM Research Pty Ltd ABN 93 122 592 036. SQM Research is an investment research firm that undertakes research on investment products exclusively for its wholesale proprietary review and star rating system. The SQM Research star rating system is of a general nature and does not take into account the particular circumstances or needs of any specific person. The rating may be subject to Only licensed financial advisers may use the SQM Research star rating system in determining whether an investment is appropriate to a person’s particular circumstances or needs. You should read the product disclosure sta licensed financial adviser before making an investment decision in relation to this investment product. SQM Research receives a fee from the Fund Manager for the research and rating of the managed investment.
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