According to Morningstar, 37.75 per cent of actively managed small-cap Australian share funds met or outperformed the S&P/ASX Small Ordinaries Accumulation Index over the year to August 31, which is similar to the large caps. Yet over three years, the number jumps to 82.08 per cent, and to almost all – 96.75 per cent – of the 123 monitored by Morningstar over five years. "There is much greater reward for differentiating between Ramsay and Primary, than between Westpac and CBA," said Bennelong Australian Equity Partners' Investment Director, Julian Beaumont. "For example, over the last decade or so, many smaller-cap fund managers have benefited from limited exposure to the smaller resources stocks, which tend to be lower quality, often speculative, and generally underperform over time." (VIEW LINK)
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