The second best performing equity manager during the period was Melbourne-based Collins Street Value Fund, which returned 37.3% net of fees.
According to the Collins Street Fund’s December quarter update, it held 20% of its assets in energy companies, with 21% in consumer discretionary.
He also disclosed that he had an unspecified allocation to the uranium sector, which generated huge returns for investors. The price of uranium hit an 11-year high of $64.50 a pound on April 13 and has more than tripled since 2017, according to data provider Trading Economics.
The Collins Street Fund is also the best performer over the past three years among the current top 10. It returned 35.3% pa over three years, followed by the First Sentier Australian Equities Geared Fund at 26% pa.
The Quest Long Short Fund, Panther Trust Australian Shares Fund and Australian Eagle Long Short Fund round out the top five in Mercer’s entire universe. They returned 30.7%, 30.4% and 30% respectively over the 12 month period.
The First Sentier Australian Equities Geared Fund ranked ninth overall for the 12-month period and first for five-year performance, with an average return of 21.3% each year.
The fund is open to wholesale investors and can borrow to amplify returns. As of March 31, the strategy led by veteran fund manager Dushko Bajic had overweight positions in BHP Group and liquefied natural gas provider Santos.
“We adjusted the fund’s holdings across a variety of sectors during the quarter, particularly healthcare, materials and financials,” First Sentier said in its quarterly update.
The asset manager added that he believes commodity prices will remain high to generate good returns for some commodity miners in the medium to long term. He also positioned the fund for higher interest rate environment.
“Within the financial sector, we have rebalanced the portfolio by adding and reducing several constituents,” he said.
“Notably, we added an insurance broker that we believe is well positioned to capitalize on rising insurance premiums, supporting double-digit EPS growth.”