Research house Lonsec has upgraded Aberdeen Asset Management's Ex-20 Australian Equities Fund to 'highly recommended'.
Launched in August 2014, Aberdeen said the fund is a concentrated portfolio of 20-60 companies that are primarily listed on the ASX, but excludes that largest 20.
According to Aberdeen head of Australian equities Rob Penaloza, the fund gives the asset manager an "opportunity to deliver value to clients looking for an alternative or a complement to their large cap Australian equities exposure".
"There are some compelling reasons for investing outside the top 20 Australian stocks. Our research shows that alpha potential for active Australian equity managers increases when you exclude the largest 20 companies from the ASX 300 index," he said.
"That's partly because these companies are heavily researched, making it more difficult to uncover new information and exploit inefficiencies."
"They are also heavily skewed to the Financials sector, creating a challenge for diversification. An ex-20 fund can reduce risk by offering greater diversification across a more equally weighted universe," Mr Penaloza said.
The fund is currently available on AMP's North platform, BT Wrap, Asgard, IOOF pursuit and Macquarie Wrap.
SUBSCRIBE TO THE IFA DAILY BULLETIN
- 20 Oct 2017Parliamentary insurance group formedBy Staff Reporter
- 20 Oct 2017Treasurer introduces BEAR legislationBy Aleks Vickovich
- 20 Oct 2017Westpac to refund $65m to customersBy Annie Kane
- 20 Oct 2017Survey tips independent takeoverBy Aleks Vickovich and Jessica Yun
- 18 Oct 2017AFA suffers budget blowoutBy Killian Plastow
- 18 Oct 2017ISA ups ante on governance lobbyingBy Aleks Vickovich
- view all