In a period which included shocks like Brexit and the Trump election win, equity markets performed surprisingly well in the 2017 Financial Year, with the Australian market up around 14% including dividends and global markets up around 20%. Most investors would be ecstatic with this type of performance every year and after the disappointment of the 2016 Financial Year, where most markets went nowhere, was a nice return to positivity for investors.

Below we have listed the performance of all of the ETFs and LICs that we follow at ETF Watch. Only funds which were available on 1 July 2016 have been included, which means the 36 ETFs and LICs launched in the last 12 months are not included below.

The clear winner for the year was hedge fund Henry Morgan Limited (HML). We took a look at HML when their second LIC, BHD, was preparing for launch. Interestingly, HML has been on trading halt for the last few weeks as ASIC investigates some of their activities, so time will tell if their extroadinary performance can be repeated. Second behind HML was relatively unknown LIC Global Masters Fund (GFL), which is invested primarily in Warren Buffett’s Berkshire Hathaway. GFL has mysteriously moved from around a 20% discount to its underlying NAV to around a 20% premium which along with Berkshire Hathway’s strong performance of late has contributed to its returns. Third on the leaderboard is ETFs Plysical Palladium (ETPMPD). Palladium is a metal used primarily for car exhaust systems, which has seen strong price raises of late due to global shortages.

Beyond a somewhat unusual top 3, things start getting a little more normal. As expected in strong equity markets, geared funds (which use internal borrowing to increase potential returns but also increase risk) performed well, so too did Asian focused funds, with Asian sharemarkets being the top global performers in the last year.

At the other end of the table, inverse ETFs which take a bet agaisnt the market of course performed poorly, with the bear bet not being one that paid off in FY 2017, additionally one of the top performers of FY 2016, Vaneck Vectors Gold Miners ETF (GDX) was one of this year’s worst performers, helping to prove that backing last year’s winners doesn’t always pay off. A number of LICs with an Absolute Return focus also performed poorly due to their lack of exposure to general market rises.

Of the 207 funds in the below table, 76% gave a positive return for the last financial year, up from around 40% in FY 2016, proof that for most investors the last financial year will be a year to remember.

* Income yield has been calculated based on income divided by closing price on 30 June 2016. Total performance has been calculated by simply adding the performance and the yield (ignoring the timing of dividend payments). Whilst the franked component of income payments has been calculated, the income payment has not been grossed up by the franking credits. All performance is based on closing share prices rather than underlying Net Tangible Assets. As usual, past performance should not be used as an indication of possible future returns, and we recommend this data not be used to support investment decisions.