A study was conducted to analyze rates of return on all equity investments of mining shares listed on the Sydney Stock Exchange. The rate of return was equal to the capital gains or losses adjusted for dividends and other changes. No consideration was made for taxation differentials. Monthly data from the period January 1958 to February 1979 were used. The overall index for the mining shares was computed on a value-weighted basis. The results of the study showed that the average return on the mining equity investments during this period was 11.9% annually. Second, the standard deviation of return of mining returns was relatively high. Comparison of this to returns for industrial and commercial portfolios were unfavorable. Third, mining shares exhibited a high degree of correlation with commercial and industrial returns. Fourth, although larger mining corporations tended to have lower standard deviations of return, no clear correlation between size and average return was apparent.
Full text: Australian Journal of Management, Oct 1980
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