NEWS
15 Sep 2022 - Growing financial risks favour small and mid-sized global companies
|
Growing financial risks favour small and mid-sized global companies Bell Asset Management August 2022 |
|
|
Global equities boutique manager Bell Asset Management sees rising geopolitical and macroeconomic risks ahead and expects small and mid-sized quality companies with an international focus to offer the best value in the current market. According to Ned Bell, Chief Investment Officer, Bell Asset Management (BAM), China's sharp growth slowdown will impact the global economy, especially emerging markets, while there are growing risks the world's central banks could hike interest rates too sharply in the battle against rising inflation. "The global macroeconomic environment is changing dramatically, with economic growth slowing pretty quickly. And for the first time ever that slowdown is being led by China," said Mr Bell. "What also worries us is to what extent central banks will be able to get on the right side of managing the inflation surge. The big risk is they do too much as the economy slows," he added. Taking a more positive perspective, Mr Bell said the uncertain outlook was likely to bring plenty of buying opportunities for actively managed fund managers like BAM. "As much as there are a lot of things to be worried about in the current market, these risks bring opportunities to the table," Mr Bell said. BAM's investment approach focuses on companies that meet a high quality threshold, which includes financial strength, consistent profitability as well as a strong focus on Environmental, Social and Governance (ESG) factors. The asset manager then looks to identify mispriced companies within this sector or those stocks that display a disconnect between quality and current value. SWITCH TO GLOBAL SMALL AND MID-CAP COMPANIESAs a result of the changing macroeconomic environment, Mr Bell said the Bell Global Equities Fund had cut its weighting in large global companies and increased its allocation to smaller and mid-sized (SMID) firms as they offer more attractive valuations. "We've got 42% (of the fund's assets) in the SMID area. At the same time, we're probably the most underweight in mega caps that we have ever been," Mr Bell said. The benchmark MSCI World SMID Cap Index currently has a forward price/earnings (p/e) ratio of 15 times, compared to 24 times for the MSCI World Large Cap Growth Index. Mr Bell noted that the Global SMID cap p/e ratio currently stood at a significant discount to the MSCI World Large Cap Growth Index and traded at a discount to the main MSCI World Index compared to an average premium of 12% over the past 10 years. The COVID pandemic has given many global SMID companies a further boost with many forced to cut costs sharply. Mr Bell explained, "They had no choice. They cut so much cost out of their businesses that the actual earnings for the SMID asset class is 70% higher this calendar year than the pre-COVID level in 2019. As a result, they are able to absorb what is happening now more than they otherwise would have been able to." ESG INTEGRATED INTO INVESTMENT PROCESSAdrian Martuccio, Co-portfolio manager at BAM, said the fund manager's focus on its global SMID strategy had also led to a lower carbon footprint for the Bell Global Equities Fund. "Fundamentally we believe that if you have a portfolio with great ESG characteristics as well as meeting other quality metrics, then it's going to help you outperform. There is a very tight correlation between quality companies and good ESG outcomes," Mr Martuccio said. "We believe having a quality bias does help because it means you generally steer clear of many of utility stocks and other stocks that aren't environmentally friendly, but you really have to have some positive selection and active portfolio construction to get a carbon intensity level as low as BAM's," he added. The Bell Global Equities Fund and the Bell Global Emerging Companies Fund have ESG scores consistently above the MSCI World Index and the MSCI World SMID Cap Index, and a significantly lower carbon intensity.
|
14 Sep 2022 - Performance Report: Bennelong Concentrated Australian Equities Fund
| Report Date | |
| Manager | |
| Fund Name | |
| Strategy | |
| Latest Return Date | |
| Latest Return | |
| Latest 6 Months | |
| Latest 12 Months | |
| Latest 24 Months (pa) | |
| Annualised Since Inception | |
| Inception Date | |
| FUM (millions) | |
| Fund Overview | |
| Manager Comments | The Bennelong Concentrated Australian Equities Fund has a track record of 13 years and 7 months and has outperformed the ASX 200 Total Return Index since inception in February 2009, providing investors with an annualised return of 14.15% compared with the index's return of 9.7% over the same period. On a calendar year basis, the fund has experienced a negative annual return on 2 occasions in the 13 years and 7 months since its inception. Over the past 12 months, the fund's largest drawdown was -31.8% vs the index's -11.9%, and since inception in February 2009 the fund's largest drawdown was -31.8% vs the index's maximum drawdown over the same period of -26.75%. The fund's maximum drawdown began in December 2021 and has lasted 8 months, reaching its lowest point during June 2022. During this period, the index's maximum drawdown was -11.9%. The Manager has delivered these returns with 1.98% more volatility than the index, contributing to a Sharpe ratio which has fallen below 1 five times over the past five years and which currently sits at 0.79 since inception. The fund has provided positive monthly returns 89% of the time in rising markets and 19% of the time during periods of market decline, contributing to an up-capture ratio since inception of 140% and a down-capture ratio of 96%. |
| More Information |
14 Sep 2022 - Sector Spotlight: Mineral Resources
|
Sector Spotlight: Mineral Resources Airlie Funds Management July 2022 |
|
Join Vinay as he discusses what makes Mineral Resources a unique business and how it's positioned for future growth. Speaker: Vinay Ranjan, Equities Analyst Funds operated by this manager: Important Information: Units in the fund(s) referred to herein are issued by Magellan Asset Management Limited (ABN 31 120 593 946, AFS Licence No. 304 301) trading as Airlie Funds Management ('Airlie') and has been prepared for general information purposes only and must not be construed as investment advice or as an investment recommendation. This material does not take into account your investment objectives, financial situation or particular needs. This material does not constitute an offer or inducement to engage in an investment activity nor does it form part of any offer documentation, offer or invitation to purchase, sell or subscribe for interests in any type of investment product or service. You should obtain and consider the relevant Product Disclosure Statement ('PDS') and Target Market Determination ('TMD') and consider obtaining professional investment advice tailored to your specific circumstances before making a decision to acquire, or continue to hold, the relevant financial product. A copy of the relevant PDS and TMD relating to an Airlie financial product or service may be obtained by calling +61 2 9235 4760 or by visiting www.airliefundsmanagement.com.au. Past performance is not necessarily indicative of future results and no person guarantees the future performance of any financial product or service, the amount or timing of any return from it, that asset allocations will be met, that it will be able to implement its investment strategy or that its investment objectives will be achieved. This material may contain 'forward-looking statements'. Actual events or results or the actual performance of an Airlie financial product or service may differ materially from those reflected or contemplated in such forward-looking statements. This material may include data, research and other information from third party sources. Airlie makes no guarantee that such information is accurate, complete or timely and does not provide any warranties regarding results obtained from its use. This information is subject to change at any time and no person has any responsibility to update any of the information provided in this material. Statements contained in this material that are not historical facts are based on current expectations, estimates, projections, opinions and beliefs of Airlie. Such statements involve known and unknown risks, uncertainties and other factors, and undue reliance should not be placed thereon. Any third party trademarks contained herein are the property of their respective owners and Airlie claims no ownership in, nor any affiliation with, such trademarks. Any third party trademarks that appear in this material are used for information purposes and only to identify the company names or brands of their respective owners. No affiliation, sponsorship or endorsement should be inferred from the use of these trademarks.. This material and the information contained within it may not be reproduced, or disclosed, in whole or in part, without the prior written consent of Airlie. |
14 Sep 2022 - Cracking the code on digital advice
|
Cracking the code on digital advice abrdn August 2022 The financial advice industry has long touted the inevitability of digital solutions to close the financial advice gap in Australia, but there has been little progress to date. Industry players are reluctant to dive in thanks to red tape and complex rules, while a lack of regulatory support is stifling overseas investment and the local fintech community. But with the recent change in Australia's federal government and with the Treasury's Quality of Advice review into the affordability and accessibility of quality advice underway, the industry has a unique opportunity to call for the changes needed to bring digital solutions to the fore. In our view, now is the time to bring fresh thinking and establish an environment to promote robust digital advice solutions that enhance the lives of Australians and reduce anxiety around retirement planning. Glitches in the current modelAdvisers have been leaving the industry en masse due to the increased burden of ongoing accreditation and regulatory compliance costs in the wake of the Hayne Royal Commission. More than 3,000 advisers (16% of the market) left the industry in 2021, with a further 2,387 advisers predicted to leave in 2022. 1 This has also put upward pressure on the cost of advice. The median ongoing fee for advice rose to $3,256 a year in 2021 - an increase of 41% since 2018 - pricing out most Australians who say they want advice.2 Industry players widely accept that digital solutions can solve this problem by achieving a wider reach at a lower price point. But no company has successfully solved the challenge of providing digital financial advice in Australia, even though proven technology exists overseas. "No company has solved the challenge of providing digital financial advice in Australia, even though proven technology exists." Advice groups and investors are reluctant to launch digital financial advice in Australia because the rules are not clear. The risk either of losing their licence or of facing financial recourse from the regulator is seen as too great. Under the current model, the Australian Securities and Investment Commission (ASIC) is set up to be a code and conduct enforcer as opposed to helping firms to get their solutions over the line in a compliant manner. Unless this changes, overseas companies with existing solutions looking to expand their footprint to other markets, as well as local fintechs and established financial institutions, will be hesitant to do so here in Australia. Sparking innovation through collaborationOther government jurisdictions have taken a proactive approach to support financial services companies in developing innovative digital advice solutions and bringing them to market in a compliant way. The Monetary Authority of Singapore, for example, works directly with the financial sector to accelerate technology adoption. It launched the Fintech Regulatory Sandbox in 2016 to empower companies to experiment with digital solutions by relaxing legal and regulatory requirements for a limited period. Similarly, the UK's Financial Conduct Authority created Innovation Pathways to help financial services firms launch innovative products. It provides clear guidance on rules and offers one-to-one discussions with a dedicated case manager. We believe Australia's advice industry would see more early innovation if ASIC had a similar mandate. In our view, increasing ASIC's responsibility to help launch new digital initiatives by taking a more hands-on approach would not only accelerate innovation, but also attract more investment from companies in markets with well-established digital advice solutions. In developing the digital advice journeys, there should be an opportunity for regulators to help shape the solution, agree on the objectives and test the solution with clients in the marketplace to ensure intended outcomes can be met. Proven technologies can fast-track digital adviceThe good news is that proven digital solutions could be fast-tracked for the Australian market if the regulatory environment were to change. For example, digital advice journeys have been tried and tested by tens of thousands of abrdn's UK clients and have helped to close the financial advice gap in the UK. These could be adapted quickly for Australia's market. Dubbed bionic advice, abrdn's UK offering provides a hybrid between digital automation and the services of a human adviser. Clients digitise key information about their goals, lifestyle and other data inputs - freeing up paraplanning time and driving down the cost of advice. One of abrdn's UK digital journeys, for example, provides guidance to clients approaching retirement. Clients enter their data into digital tools to estimate their retirement income and model various scenarios. At this point, clients can choose to engage an adviser to finish off their retirement advice plan based on the digital inputs they've already provided. The innovation breakthroughs in bionic advice are where we see a much lower price point to access advice and reduce the advice gap. Advisers can then focus entirely on the value-add part of the journey, providing genuinely helpful advice. Author: Jason Nyilas, Head Of Retirement and Digital Innovation, Australia |
|
Funds operated by this manager: Aberdeen Standard Actively Hedged International Equities Fund, Aberdeen Standard Asian Opportunities Fund, Aberdeen Standard Australian Small Companies Fund, Aberdeen Standard Emerging Opportunities Fund, Aberdeen Standard Ex-20 Australian Equities Fund (Class A), Aberdeen Standard Focused Sustainable Australian Equity Fund, Aberdeen Standard Fully Hedged International Equities Fund, Aberdeen Standard Global Absolute Return Strategies Fund, Aberdeen Standard Global Corporate Bond Fund, Aberdeen Standard International Equity Fund , Aberdeen Standard Life Absolute Return Global Bond Strategies Fund, Aberdeen Standard Multi Asset Real Return Fund, Aberdeen Standard Multi-Asset Income Fund 1 https://www.ardata.com.au/wp-content/uploads/2022/05/AFALandscape2022-AB_R2.pdf 2 https://www.ardata.com.au/wp-content/uploads/2022/05/AFALandscape2022-AB_R2.pdf |
13 Sep 2022 - Performance Report: Bennelong Australian Equities Fund
| Report Date | |
| Manager | |
| Fund Name | |
| Strategy | |
| Latest Return Date | |
| Latest Return | |
| Latest 6 Months | |
| Latest 12 Months | |
| Latest 24 Months (pa) | |
| Annualised Since Inception | |
| Inception Date | |
| FUM (millions) | |
| Fund Overview | |
| Manager Comments | The Bennelong Australian Equities Fund has a track record of 13 years and 7 months and has outperformed the ASX 200 Total Return Index since inception in February 2009, providing investors with an annualised return of 12.44% compared with the index's return of 9.7% over the same period. On a calendar year basis, the fund has only experienced a negative annual return once in the 13 years and 7 months since its inception. Over the past 12 months, the fund's largest drawdown was -29.91% vs the index's -11.9%, and since inception in February 2009 the fund's largest drawdown was -29.91% vs the index's maximum drawdown over the same period of -26.75%. The fund's maximum drawdown began in December 2021 and has lasted 8 months, reaching its lowest point during June 2022. During this period, the index's maximum drawdown was -11.9%. The Manager has delivered these returns with 1.53% more volatility than the index, contributing to a Sharpe ratio which has fallen below 1 five times over the past five years and which currently sits at 0.71 since inception. The fund has provided positive monthly returns 90% of the time in rising markets and 17% of the time during periods of market decline, contributing to an up-capture ratio since inception of 130% and a down-capture ratio of 99%. |
| More Information |
13 Sep 2022 - Australian Secure Capital Fund - Market Update
|
Australian Secure Capital Fund - Market Update August Australian Secure Capital Fund August 2022
Funds operated by this manager: ASCF High Yield Fund, ASCF Premium Capital Fund, ASCF Select Income Fund |
|||||||||||||||||||||||||||||||||
13 Sep 2022 - Macro is still in the driver's seat
|
Macro is still in the driver's seat Novaport Capital September 2022 Hear from Sinclair Currie, Principal and Co-Portfolio Manager at NovaPort Capital, as he shares his insights on how smaller companies fared over the past few weeks as they reported their earnings to the market. While at first glance the numbers were better than expected, what was conspicuously absent was forward looking guidance. Sinclair will share his insights on the themes that were uncovered, how various sectors performed, and the standout stocks - good and bad. He will also discuss how investors can navigate an inflationary environment by following the fundamentals. Funds operated by this manager: NovaPort Microcap Fund, NovaPort Wholesale Smaller Companies Fund |
12 Sep 2022 - Performance Report: Insync Global Capital Aware Fund
| Report Date | |
| Manager | |
| Fund Name | |
| Strategy | |
| Latest Return Date | |
| Latest Return | |
| Latest 6 Months | |
| Latest 12 Months | |
| Latest 24 Months (pa) | |
| Annualised Since Inception | |
| Inception Date | |
| FUM (millions) | |
| Fund Overview | Insync invests in a concentrated portfolio of high quality companies that possess long 'runways' of future growth benefitting from Megatrends. Megatrends are multiyear structural and disruptive changes that transform the way we live our daily lives and result from a convergence of different underlying trends including innovation, politics, demographics, social attitudes and lifestyles. They provide important tailwinds to individual stocks and sectors, that reside within them. Insync believe this delivers exponential earnings growth ahead of market expectations. The fund uses Put Options to help buffer the depth and duration that sharp, severe negative market impacts would otherwide have on the value of the fund during these events. Insync screens the universe of 40,000 listed global companies to just 150 that it views as superior. This includes profitability, balance sheet performance, shareholder focus and valuations. 20-40 companies are then chosen for the portfolio. These reflect the best outcomes from further analysis using a proprietary DCF valuation, implied growth modelling, and free cash flow yield; alongside management, competitor, and industry scrutiny. The Fund may hold some cash (maximum of 5%), derivatives, currency contracts for hedging purposes, and American and/or Global Depository Receipts. It is however, for all intents and purposes, a 'long-only' fund, remaining fully invested irrespective of market cycles. |
| Manager Comments | The Insync Global Capital Aware Fund has a track record of 12 years and 11 months and has underperformed the Global Equity Index since inception in October 2009, providing investors with an annualised return of 9.6% compared with the index's return of 10.4% over the same period. On a calendar year basis, the fund has experienced a negative annual return on 2 occasions in the 12 years and 11 months since its inception. Over the past 12 months, the fund's largest drawdown was -27.39% vs the index's -15.77%, and since inception in October 2009 the fund's largest drawdown was -27.39% vs the index's maximum drawdown over the same period of -15.77%. The fund's maximum drawdown began in January 2022 and has lasted 7 months, reaching its lowest point during June 2022. The Manager has delivered these returns with 0.92% more volatility than the index, contributing to a Sharpe ratio which has fallen below 1 five times over the past five years and which currently sits at 0.69 since inception. The fund has provided positive monthly returns 81% of the time in rising markets and 21% of the time during periods of market decline, contributing to an up-capture ratio since inception of 60% and a down-capture ratio of 84%. |
| More Information |
12 Sep 2022 - Performance Report: 4D Global Infrastructure Fund (Unhedged)
| Report Date | |
| Manager | |
| Fund Name | |
| Strategy | |
| Latest Return Date | |
| Latest Return | |
| Latest 6 Months | |
| Latest 12 Months | |
| Latest 24 Months (pa) | |
| Annualised Since Inception | |
| Inception Date | |
| FUM (millions) | |
| Fund Overview | The fund is managed as a single portfolio including regulated utilities in gas, electricity and water, transport infrastructure such as airports, ports, road and rail, as well as communication assets such as the towers and satellite sectors. The portfolio is intended to have exposure to both developed and emerging market opportunities, with country risk assessed internally before any investment is considered. The maximum absolute position of an individual stock is 7% of the fund. |
| Manager Comments | The 4D Global Infrastructure Fund (Unhedged) has a track record of 6 years and 6 months and has underperformed the S&P Global Infrastructure TR (AUD) Index since inception in March 2016, providing investors with an annualised return of 8.75% compared with the index's return of 8.86% over the same period. On a calendar year basis, the fund has only experienced a negative annual return once in the 6 years and 6 months since its inception. Over the past 12 months, the fund's largest drawdown was -5.82% vs the index's -3.91%, and since inception in March 2016 the fund's largest drawdown was -19.77% vs the index's maximum drawdown over the same period of -24.67%. The fund's maximum drawdown began in February 2020 and lasted 2 years and 2 months, reaching its lowest point during September 2020. The fund had completely recovered its losses by April 2022. The Manager has delivered these returns with 0.35% less volatility than the index, contributing to a Sharpe ratio which has fallen below 1 five times over the past five years and which currently sits at 0.69 since inception. The fund has provided positive monthly returns 94% of the time in rising markets and 13% of the time during periods of market decline, contributing to an up-capture ratio since inception of 97% and a down-capture ratio of 98%. |
| More Information |
12 Sep 2022 - Managers Insights | Collins St Asset Management
|
|
||
|
Chris Gosselin, CEO of FundMonitors.com, speaks with Rob Hay, Head of Distribution & Investor Relations at Collins St Asset Management. The Collins St Value Fund has a track record of 6 years and 6 months and has outperformed the ASX 200 Total Return Index since inception in February 2016, providing investors with an annualised return of 16.78% compared with the index's return of 9.42% over the same period.
|
