10 of the highest returning equities funds in Australia

Some people just have a knack for making formidable challenges look easy. Take Nedd Brockmann, for instance, the 24-year-old sparky who averaged 80km per day to run from Perth to Sydney. Or Willis Gibson, the Oklahoma-born 13-year-old boy who just became the first human to ever beat Tetris. 

The past year's top-performing fund managers similarly have made double-digit annual returns look like a piece of cake. 63 of the 127 funds listed on our database delivered double-digit returns over the past 12 months - and 83 funds beat the S&P/ASX 200 benchmark's 7.8% return in 2023. 

Meanwhile, 41 funds, or 32.3% of the Aussie equities funds listed on Livewire's database, underperformed the benchmark. Only two funds on our database posted negative returns. 

So what set the highest-returning funds apart from the rest of the pack? In this wire, I'll highlight the five top-performing small and mid to large-cap funds listed on Livewire's 'Find Funds' database. Plus, I'll outline some of the common themes and stocks that helped these portfolio managers deliver market-leading returns. 

How we compiled these lists

The Australian equities funds mentioned in this piece are all listed on the Livewire 'Find Funds' database (top right-hand side of your page). There are 127 Australian equities-focused managed funds listed on this database, so this is not an exhaustive list of all Aussie equities funds domiciled in Australia.

The filters we used to compile these lists were: 

• In the “Fund type” box, select “Managed Funds”
• In “Asset Class”, select “Aussie equities"
• We then filtered results based on 1-year returns.

The Results

We have also separated the best performers into large-to-mid-cap and small-to-mid-cap categories, given that investors typically use managed funds for exposure to both (rather than a one-size-fits-all fund). 

Interestingly, despite small-caps lagging their large-cap counterparts over the past 12 months, it was the small-cap managers who took home the bacon in 2023. In fact, eight out of the top 10 highest-returning funds on Livewire's Aussie equities database were small-cap funds.

The majority of funds that made the top five lists above are growth-focused funds rather than value-focused funds - which topped the charts back in 2022. 

Without further ado, check out the top performers below.  

Note: You can scroll across with your cursor to see these funds' performance figures over three years, five years, and since inception. 

The 5 top-performing large to mid-cap funds over the past 12 months 

The 5 top-performing small-cap funds over the past 12 months

Note: While the list above ranks funds on 12-month performance, typically, fund performance is viewed over longer timeframes i.e. three-year and five-year rolling periods. As the saying goes, past performance is not a reliable indicator of future return.

The data above is supplied by Morningstar. If you would like to conduct research of your own into top-performing funds, you can do so by clicking here. Please talk to a financial services professional before making any investment decisions. 

Top holdings from the 3 highest-returning mid to large-cap funds

Managed Fund

First Sentier Wholesale Geared Share Fund

Australian Shares

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This Fund invests in large Australian listed companies, holding between 30 to 40 stocks in the portfolio. The Fund utilises gearing to magnify returns from underlying investments.

As of the end of November, the Fund's top five positions were BHP Group (ASX: BHP), Commonwealth Bank (ASX: CBA), CSL (ASX: CSL), National Australia Bank (ASX: NAB) and QBE Insurance (ASX: QBE). 

Recently, First Sentier's deputy head of Australian Equities David Wilson appeared on Livewire's Buy Hold Sell. During the episodes, he pitched stocks like ResMed (ASX: RMD), Aristocrat Leisure (ASX: ALL), Santos (ASX: STO), and James Hardie (ASX: JHX) as potential winners in 2024. 

On the flip side of that, David predicted that the regional banks could have a tough 2024 - with margins and cost structures under pressure. He recommended investors avoid Bank of Queensland (ASX: BOQ) in 2024. He also warned that investors should be wary of companies undertaking M&A. 

"If you look at the Evolution (ASX: EVN) deal, the APA (ASX: APA) deal, the Orora (ASX: ORA) deal, and the Treasury (ASX: TWE) deal - in all four circumstances, the market has not liked those deals. So I'd be wary of companies undertaking M&A," he said. 

This Fund requires a minimum investment of $5,000 and has an annual management fee of 2.18% per annum. 

Managed Fund

Hyperion Australian Growth Companies Fund

Australian Shares

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This Fund invests in high-quality companies within the S&P/ASX 300. It has a management fee of 0.95% per annum and no performance fees. The minimum investment for this Fund is $20,000. 

According to its latest update (from November), the Fund's top holdings were Block (ASX: SQ2) - which it has an 11.7% portfolio weighting to, Xero (ASX: XRO), WiseTech Global (ASX: WTC), Fisher & Paykel Healthcare (ASX: FPH) and CSL Ltd (ASX: CSL). 

In this update, the team argued that some of the headwinds the strategy faced may reverse to become tailwinds over the coming months. 

"The first of which is a recovery in healthcare names such as Resmed (ASX: RMD), CSL Limited, and Fisher & Paykel Healthcare Ltd. as the negative hype cycle around GLP-1 weight loss drugs subsides and the underlying quality of their earnings becomes apparent," the team wrote. 

"Another area we believe could support returns are companies seeing improved management execution such as in Domino’s Pizza Enterprises (ASX: DMP), Xero Ltd. and Block Inc." 

Hyperion revealed the team had been taking advantage of depressed share prices in these names in recent months.

Managed Fund

First Sentier ex-20 Australian Share Fund

Australian Shares

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This Fund invests in companies within the S&P/ASX 300 Index but outside the top 20 stocks. The team believes that growing companies that are generating consistent returns and reinvesting above their cost of capital can provide the greatest potential shareholder value. 

The Fund has a minimum investment requirement of $500,000, management fees of 0.75% p.a. and a performance fee of 15% multiplied by the difference between the Fund’s performance and the aggregate performance of the benchmark of S&P/ASX 300 Ex 20. 

According to the Fund's latest update (as of the end of December 2023), its top holdings were AUB Group (ASX: AUB), Pro Medicus (ASX: PME), Steadfast (ASX: SDF), WiseTech Global (ASX: WTC), and Xero (ASX: XRO).

Top holdings from the 3 highest-returning small-cap funds

Managed Fund

Hyperion Small Growth Companies Fund

Australian Shares

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This Fund aims to generate long-term capital growth by investing in stocks outside of the S&P/ASX 100. Hyperion believes that high-quality businesses with strong competitive advantages and organic growth opportunities produce superior returns over the long term - and from their performance since inception (30 September 2002), I'd take their word for it. 

As of their latest fund update (which was also in November), the Fund's top holdings were Wisetech Global (ASX: WTC) - although they did spell WiseTech wrong in the update, which is slightly worrying, Fisher & Paykel Healthcare (ASX: FPH), Xero (ASX: XRO), HUB24 (ASX: HUB), and Domino’s Pizza Enterprises (ASX: DMP). 

In the update, the team pointed to its positions in Temple & Webster Group (ASX: TPW), Audinate Group (ASX: AD8) and Kogan.com (ASX: KGN) for its stellar returns during the month, arguing the "high quality of growth and sustainability of earnings attributes of our portfolio has greatly contributed to our performance". 

"We believe the macro headwinds that the market has faced over the past couple of years are in the process of ending and these headwinds have the potential to become tailwinds in future years," the team penned in the update. 

This fund requires a minimum investment of $20,000 and an annual management fee of 1.25% (plus 15% of outperformance above the S&P/ASX Small Ordinaries Accumulation Index). 

Managed Fund

Elston Australian Emerging Leaders Fund

Australian Shares

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This Fund's main objective is to outperform the S&P/ASX Small Ordinaries Accumulation Index by 3.0% p.a. after fees on a rolling five-year basis. It has a minimum investment requirement of $20,000, management fees of 0.88% p.a. and performance fees of 20% p.a.

This is a high-conviction portfolio of stocks - typically investing in 15 to 25 companies. It is mandated to hold up to 10% in cash. 

Currently, its top five holdings are Temple & Webster Group (ASX: TPW), Audinate Group (ASX: AD8), Polynovo (ASX: PNV), Corporate Travel Management (ASX: CTD), and Nick Scali (ASX: NCK). 

In a recent update, the team recommended investors look through the short-term noise to be successful over the coming year. 

"The market will likely shift its focus to longer-term considerations once there is increased certainty regarding the short-term macro factors," the Elston team wrote.  

"By this point, as the downside becomes more apparent, the share prices of discounted businesses are likely to have rebounded. Consequently, we think it’s imperative to take a longer-term perspective rather than try to time the market." 

Managed Fund

Lakehouse Small Companies Fund

Australian Shares

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This Fund invests in small-cap stocks listed in Australia and New Zealand. This is a growth-focused fund that invests in companies with strong positions in growing markets, pricing power with customers and suppliers, durable competitive advantages, aligned and experienced management teams, and conservative balance sheets, at attractive valuations.

The Fund has a minimum investment requirement of $100,000 and charges 1.30% per annum in management fees (as well as a 15% performance fee on outperformance). 

In its latest December update, Lakehouse said the Fund's top five holdings were Siteminder (ASX: SDR), Netwealth (ASX: NWL), Pinnacle Investment Management (ASX: PNI), Nanosonics (ASX: NAN), and Audinate (ASX: AD8). These holdings make up 36.8% of the total portfolio. 

In the update, the team argued they were committed to sticking to their mandate and strategy. 

"Although macroeconomic factors continue to be emphasised by the market, we remain committed to our long-term, growth-focused investment philosophy, and consistently executing on our process to identify companies that can deliver across the economic cycle," they wrote.