With solo funds and other funds now a mainstay of the Australian economy, investors are backing them up more aggressively.
Read more It’s a trend that has attracted the attention of investment managers and fund managers, who are looking to diversify their portfolios by taking a riskier approach.
It is no surprise, then, that the top solo funds in Australia have all increased in their market cap over the past few years.
Investors are spending less time chasing their own returns and more time trying to profit from the performance of other funds.
With the S&P 500 at its record high and a healthy US economy, it’s a perfect time to start investing solo, says David Faucher, a fund manager at Horsham Capital Management.
“We are seeing a lot of money being taken out into solo funds, and I think that will continue,” he says.
The S&s average returns are currently around 4 per cent.
In a market that is still relatively young, solo funds are attracting a large amount of capital and, with the SBC in particular having a strong reputation, the industry has been growing.
Over the past 12 months alone, the SRC has increased by over 1,000 per cent and the SAB is currently at around 9,000.
So far this year, the total market cap of the SMC alone has increased about 7 per cent from 2016.
And investors are getting more comfortable with solo funds as their returns increase.
A recent study from the investment firm Morningstar showed the SVC was now the best performing fund in Australia, beating the SCC and the Vanguard Group in terms of overall market performance.
This trend is likely to continue.
According to Morningstar, the average SVC return over the last 12 months has averaged about 5.6 per cent per year.
More:SRC returns are also on the rise, with average returns over the first half of this year being up more than 10 per cent over the same period last year.
The SVC has increased its market cap by almost a quarter in the past year, according to MorningStar, with its market capitalisation now sitting at $2.2 billion.
SVC returns are forecast to rise by more than 20 per cent this year.