Mirrabooka Investments trims sails
Mid and small cap-focused fund manager, Mirrabooka Investments Limited has trimmed its sails and strengthened its cash position in the face of what it describes as a trend reversal.
The company announced today that profit for the half-year was $3.9 million, down 20.4 per cent on the previous corresponding period.
It said the major difference was the reduced contribution from the trading and options portfolios during the half, which showed a combined loss before tax of $11,000 compared to a gain of $1.2 million in the previous corresponding period.
Noting that the company was an investor in small and mid-cap companies, the Mirrabooka announcement said these sectors of the market had been dominated by two key themes recently -the first was the very strong performance of the mid and small-cap resource sectors, which were up 40.2 per cent and 6.3 per cent respectively over the six month period, 95.4 per cent and 59.5 per cent over the 12 month period, as commodity prices increased significantly in response to a more positive global economic outlook.
It said the second was a rotation by the market out of highly priced mid and small industrial companies, many of which had been priced for perfection, back to larger companies which until recently had substantially underperformed.
The announcement said this move was accelerated by a number of the mid and small companies
revising their previously robust profit outlook.
"In this environment, Mirrabooka's short term portfolio performance was below its mid and small cap benchmark, particularly as the Company has few investments in the resource sector," it said.
However it said the longer term performance of Mirrabooka was still well ahead of its benchmark, noting that five year returns including the benefit of franking were 16.5 per cent per annum compared with the benchmark of 10.7 per cent per annum.
Recommended for you
There is one specific risk that is a significantly higher concern for financial services directors compared to companies overall and is impacting their risk appetite, according to the AICD.
Global fund managers are shunning bonds, with the asset class seeing the largest drop in allocations in more than 20 years.
Australian Ethical has seen its funds under management reach $10 billion, driven by organic customer growth and superannuation contributions.
Financial advisers will have access to private equity investments run by WTW for the first time as it launches a pooled fund to provide savers with access to traditionally institutional assets.
