Reflecting popular opinion that North American equities had a stellar year in 2017, research by Money Management has found that the US Equity sector has fairly consistently outperformed its Australian counterpart since the Global Financial Crisis (GFC).
The graph below illustrates the extent to which, with the exception of some small blips during the recovery from the GFC and European Sovereign Debt Crisis, the US equity market outperformed Australia’s.
Over the 10 years to 31 January, 2018, the US equity sector delivered annualised performances more than double the Australian equivalent’s average. It returned 10.3 per cent as compared to 5.01 per cent. This trend continued over shorter time periods too; the US Equities sector returned 19.88 per cent over five years while the Australian Equity sector delivered 8.73 per cent, and 13.69 per cent over three years while Australia recorded 7.16 per cent.
In the year to 31 January, 2018 the US sector didn’t double its Australian counterpart, but still outperformed it by 5.48 per cent.
Data from FE Analytics also revealed that positive sentiment toward US equities was well-founded, with both the top-performing funds, index and sector average all delivering excellent returns....