The big Australian market cap stocks dragged the rest of the market down in the 2016 financial year.
The ASX 20 index posted a total return of -7%. The ASX 200 index fell 4.1% in the 12 months to June 2016. Including dividends, the total return was up a mere 0.6%.
“The reasons are not difficult to discern,” says UBS in a year-in-review note to clients.
“The ASX 20 index is heavily overweight underperforming banks, resources, telcos and consumer staples sectors and underweight the outperforming consumer discretionary sector.
“In fact, the underperformance of the mega-cap end of the market over the last year has been so severe that it has almost reversed a multi-year trend of outperformance that began in FY08.”
The equity market’s poor performance flowed through to superannuation returns. Median balanced accounts — those with exposure of between 60% and 76% to growth assets — where up to 70% of Australians have their money, will have gained only about 2.3% over the 12 months.
However, not all stocks failed to deliver. The key performers by size were Mid-Caps (51-100) and Small Caps (101-300), as this chart shows:
UBS worked out the best and worst performing ASX 100 stocks of the 2016 financial year: