Consistent and resilient
A strong track record of outperformance and historic resilience in tough markets has led Bennelong’s Australian Concentrated Equities Fund to take out the Australian Large Cap Equities category.
Lonsec noted the fund was capably led by chief investment officer, Mark East, who said the fund was able to outperform the market in 15 of 17 half-years since its inception, and it was this consistency that continued to attract clients.
“Over the last five years, the fund has on average shared in only half of the market’s decline in down markets and has sometimes been able to deliver positive numbers in quite trying markets.”
East credited the fund’s outperformance to a ten-year strong investment strategy, which he said was a “relatively simple approach”.
“We focus on high quality growth companies, and we specifically target those with underappreciated earnings prospects,” he said.
The strategy is backed by extensive on-the-ground research, which included meetings with not only the companies the firm intends to invest in, but also their competitors, customers, suppliers and any other industry contacts.
“We really focus on what drives earnings and shareholder returns, both in terms of upside potential and downside risks.”
The seven-person investment team is predominantly made up of bottom-up stock pickers, but there is macroeconomic and quantitative expertise to ensure “all bases are covered”.
East noted the portfolio often looks different to the market and the peer group, but this reflected the fund’s high-conviction ethos.
“We’re prepared to avoid the largest and most popular stocks, and we’re prepared to take big positions where we think it makes sense,” he said. “Of course, that conviction doesn’t come easily, requiring a focus on what’s important, an extensive and very thorough research effort, and then the confidence to back that work.”
Lonsec confirmed that the main contributors to performance were long positions in Aristocrat Leisure and Fortescue Metals, as well as an underweight position in Telstra.
According to FE Analytics, Bennelong outperformed the ASX 300 by 15.89 per cent, with returns of 18.75 per cent to last quarter-end against the benchmark’s 2.86 per cent.
The Allan Gray Australia Equity Fund was also a nominee for the category, with portfolio manager Chris Inifer crediting the fund’s consistently strong returns to their high-conviction strategy.
BlackRock’s Concentrated Industrial Share Fund was also a finalist, with the fund manager naming culture and discipline as the key drivers of its success.
AUTHOR
Anastasia Santoreneos
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