Top performing funds: 10 Australian equity funds that delivered more than 20% returns in FY24

Despite what has been a tough two years for small and micro-cap companies, a select handful of Australian fund managers have demonstrated you can still outperform the market (and by a long shot) if you pick the right stocks. 

While the S&P/ASX Small Ordinaries Index lifted around 5.8% over the financial year, the 10 top-performing Australian Equities funds for FY24 all delivered returns of approximately 24% or higher. 

These are seriously impressive returns, particularly given that the Aussie market average over the long term is considered to be around 10%. 

So, which funds shot the lights out?  

In this wire, you learn which funds made the list, as well as some of the stocks these funds are backing as of their latest market update. 

How we compile these lists

We have pulled our performance numbers from Morningstar.

The funds are all listed on Livewire’s Find Funds menu (top right-hand side of your webpage). This is not an exhaustive list of all Australian equity funds available in the Australian market.

The filters we used are:

• In the “Fund type” box, select “MANAGED FUND”
• In the “Asset class” box, select “SHARES – AUSTRALIAN”
• We then manually filtered results based on 1-year returns.

It’s worth noting that the results can change again based on 5-year returns and it’s worth looking at longer-term performance across cycles when researching funds or making investment decisions. Of the top 10, four funds have a less than 5-year track record, and two have less than a 3-year track record.

The 10 top-performing Australian Equity Funds in FY24

Note: Fund performance is typically viewed over longer timeframes than one year (i.e. three-year and five-year rolling periods). Past performance is not a reliable indicator of future return. The tables above simply capture the best-performing funds, in their respective categories, for the past 12 months. All data is supplied by Morningstar. If you would like to conduct your own research into top-performing funds, you can do so by clicking here.

The top 5 Australian Equity funds for FY24

1. Lennox Australian Microcap Fund 

Managed Fund

Lennox Australian Microcap Fund

Australian Shares

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As of the end of May, the Fund's top three active positions were Gentrack Group (ASX: GTK), MMA Offshore (ASX: MRM), and Superloop (ASX: SLC). For the month, its positions in online education technology provider Keypath Education (ASX: KED), foreign exchange broker OFX Group (ASX: OFX) and utility software provider Gentrack were the biggest contributors to its performance. 

The Fund's largest detractors from performance were outdoor media player oOh!media (ASX: OML), youth apparel retailer Universal Stores (ASX: UNI) and payment solution provider Tyro Payments (ASX: TYR). 

Livewire recently interviewed Lennox Capital Principal and Portfolio Manager James Dougherty. You can check out his views in the interview below, including the business he believes will be the ASX's "next-generation powerhouse". 

Equities

The ASX's next-generation powerhouse

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2. Ausbil MicroCap Fund 

Managed Fund

Ausbil MicroCap

Australian Shares

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The Ausbil MicroCap Fund invests in small and microcap Australian equities, and is a style-agnostic product that aims to exploit the inefficiencies across the entire market, throughout the cycle, and across all market conditions. 

Its top five positions as of its latest update in June include Aussie Broadband (ASX: ABB), Codan (ASX: CDA), Genesis Minerals (ASX: GMD), Life360 (ASX: 360) and Light & Wonder (ASX: LNW).

In the update, the team said they "continue to see an attractive investment case for smaller companies as moderating inflation, improving earnings growth and a pickup in capital market activity should help close the performance gap to large caps." 

The main contributors to the Fund's performance in June were Life360, Tuas (ASX: TUA), and MMA Offshore (ASX: MRM), which partially offset poor performance from 29Metals (ASX: 29M), Praemium (ASX: PPS), and DGL Group (ASX: DGL). 

In the update, the team said they were excited about the prospects for DUG Technologies (ASX: DUG) and Aussie Broadband (ASX: ABB) in the months ahead. 

3. Ellerston Australian Emerging Leaders Fund 

Managed Fund

Ellerston Australian Emerging Leaders Fund

Australian Shares

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This Fund uses an active, research-driven process to identify small-cap companies, with the aim of delivering superior returns to the benchmark over the long term. The Ellerston Australian Emerging Leaders Fund invests in companies with the potential to deliver significant upside over the medium term, and where there is a reasonable margin of safety to mitigate downside risk. 

These are typically businesses with sound franchises, attractive earnings profiles, and those that operate in growth industries and trade at a discount to valuation.

As of the Fund's latest update in June, its top holdings were Droneshield (ASX: DRO), Generation Development Group (ASX: GDG), Qoria (ASX: QOR), RPMGlobal Holdings (ASX: RUL) and Zip Co (ASX: Z1P).

4. Elston Australian Emerging Leaders Fund 

Managed Fund

Elston Australian Emerging Leaders Fund

Australian Shares

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This Fund aims to invest in high-quality, long-duration growth businesses that can be purchased at reasonable prices or better and held for the long term. The team manages a concentrated, active portfolio with a disciplined, long-term buy-and-hold methodology.

It invests in businesses with a minimum market cap of $150 million and the portfolio typically holds between 15 and 25 holdings. 

As of the Fund's latest update in April, the team's top five holdings were Nick Scali (ASX: NCK), Nanosonics (ASX: NAN), Siteminder (ASX: SDR), Polynovo (ASX: PNV) and Audinate Group (ASX: AD8).

5. Glenmore Australian Equities Fund 

Managed Fund

Glenmore Australian Equities

Australian Shares

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This Fund invests in quality companies generating strong cashflows at attractive valuations. It is index-unaware and has an absolute return focus. 

Glenmore uses a fundamental, research-driven investment process. The team aim to identify shares that we believe are undervalued and are likely to rise in price. The main driver of identifying potential investments is bottom-up company analysis. 

As of the Fund's latest update in June, the main contributors to its performance were Retail Food Group (ASX: RFG), HUB24 (ASX: HUB), GQG Partners (ASX: GQG), and Stanmore Resources (ASX: SMR). Its main detractors were Mineral Resources (ASX: MIN) and Pilbara Minerals (ASX: PLS).