Gold delivers best five-year returns for investors; super funds prop up IPOs
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If you’ve invested in gold stocks over the past five years you should’ve more than doubled your money, according to the ASX.
“Over the past five years if you’ve been in gold the return on average has been 150 per cent,” ASX business development manager, listings, Josh Collard told delegates at the Latin America Downunder conference in Perth.
“Metals & mining has returned about 30 per cent, and if you compare that to London, which is fairly flat, and Toronto, which is actually in negative territory, the ASX has actually performed very well over the last five years.”
Growth in Australian superannuation funds has been spurring an increasing number of IPOs.
Compulsory super was introduced in 1992 and the pool of cash currently sits at about US$2 trillion.
And it is predicted to grow to about US$9.5 trillion by 2035.
“All that money needs to find a home,” Collard said. “A lot of that money is directed towards the ASX and that’s really what drives the demand for that IPO market here in Australia.”
The ASX averages about $10 billion in IPO capital raised each year, with resources dominating those stats in the past two years.
Last year, $8.5 billion of IPO capital was raised and resources accounted for $4.1 billion of it.
“The ASX is heavily dominated by the resources industry, there’s no surprise there,” Collard said.
“Around 40 per cent of our listed community are in resources.
“At the moment resources also holds the mantle for the largest sector for market cap.”
Collard said 2018 was the second year in a row that resources was the largest sector by number of IPOs.
There were 37 successful resources IPOs last year.
The best performing IPO for 2018 was also in resources: Adriatic Metals (ASX:ADT), which gained 188 per cent, according to Collard.