Shares from organisations outside of the top 10 Australian Securities Exchange-listed companies proved to be some of the best performers as revealed by the latest reporting season, according to investment manager Van Eck Global.
The finding came as a result of an analysis performed by the fund manager that showed recent reported earnings were better than anticipated, with higher recorded profits and resulting dividends.
“The contrast between the surprisingly good year that many companies have reported and the 13.73 per cent fall in the S&P/ASX 200 Index over the same period is striking,” Van Eck Australia investments and portfolio strategy director Russell Chesler said.
“The difference is that this benchmark index is based on market capitalisation and heavily influenced by the top 10 mega-caps.”
“In several sectors, companies outside the top 10 tended to surprise on the upside.
“For instance, Newcrest was 33 per cent above analyst expectations, while BHP Billiton was 27 per cent below.
“In financials, IAG and Medibank out-surprised the big banks.”
According to Chesler, the reported results indicated in the current market a strategic investment strategy was more effective than one based on market capitalisation alone.''