Australian equity funds delivered an average return of 12.9 per cent in calendar 2017, while the S&P/ASX 300 index returned 11.9 per cent over the year, according to the Morningstar Australian Institutional Sector Survey.

Global share strategies performed slightly better, with returns of 15.6 per cent versus a 13.4 per cent return from MSCI World Ex-Australia over the same period.

Among locally-domiciled funds, some of the star performers over the year were Platypus Australian Equities [14368], SGH20 and Bennelong Concentrated--which delivered returns of 24.2 per cent, 22.9 per cent, and 30.8 per cent respectively in 2017.

The team at Platypus applies quantitative screens and fundamentals as the main drivers of its strategy, which results in "a punchy portfolio of 20-40 stocks," says Morningstar manager research analyst, Anshula Venkataraman.

"The growth-oriented process is disciplined and aims to invest in high-quality companies that can generate sustainable earnings growth," she says.

While Venkataraman notes the fund's high turnover is a drawback, this is offset by its retaining of some core holdings, which has enabled it to capitalise on their earnings growth.

She highlights the manager's growth-focused approach, targeting companies with strong, sustainable earnings growth using a cominbation of "top-down thematics with bottom-up stock selection".

In terms of cost, Venkataraman says its overall fee structure is higher than most, given the potential performance fee. "With a wholesale base fee of 96 basis points, there is also a 15.3 per cent performance fee on gross returns above the S&P/ASX 300 Accumulation Index plus 1 per cent."

International funds

Among global share strategies, top-performing funds over the year were Platinum Unhedged [15362], Johnston, and Hyperion Global Growth Companies, which returned 33 per cent, 28 per cent, and 27 per cent, respectively.

Holding a Silver- edal from Morningstar, Platinum Unhedged is a simpler and more concentrated version of the manager's Gold-medal-rated Platinum International fund.

"All positions are the output of rigorous analysis, during which the group's highly-rated investment team looks for growth prospects not currently appreciated by the market," says Michael Malseed, senior manager research analyst, Morningstar.

"Platinum's ideas also have a thematic bent, as investors aim to look beyond the numbers to identify emerging trends. We see a lot to like here ... and continue to view Platinum Unhedged as an excellent option for concentrated global equities," he says.

The fund has an annual management fee of 1.5 per cent, with no performance fee, "which is competitive when compared with other retail options," says Malseed, though he notes there is no wholesale-priced version offered through wrap platforms, making it relatively expensive in this channel.

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Glenn Freeman is a senior editor at Morningstar.

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