The Australian sharemarket
Australian equities, as measured by the S&P ASX 300, have performed well over the past five years, delivering annualised 5-year price gains of 5.39%, a figure that rises to 9.74% when dividends are taken into accountii.
However, performance has differed significantly between sectors.
Among the top performers, the Emerging Companies index, which tracks micro-cap stocks, has notched up annualised 5-year price gains of 10.54%.
Emerging Companies enjoyed a significant rally in the second half of 2025, to achieve price gains of 51.95% over the past 12 months to January 2026iii. This was supported by lower interest rates and strong performances in specific industries including green energy and specialised mining.
More broadly, Emerging Companies have attracted investor capital away from large-cap stocks, which are viewed by some investors as being overvalued.
The Utilities sector has been another strong performer, recording 5-year annualised gains of 8.96%iv. These gains reflect rising demand for power, plus the appeal of healthy cashflows and high dividends that make the Utilities sector attractive to investors.
By contrast, among the worst performing – and more volatile – sectors, Consumer Staples delivered 5-year annualised losses of 1.85%v, while the Energy sector could only muster up 5-year annualised gains of 0.32%vi.