There were five funds in this FE fundinfo Crown Fund Rating rebalance which received the highest ranking in their first-ever rating.
For funds to qualify for a rating they must have at least three years’ worth of returns.
The funds that were given 5 Crowns were Lakehouse Global Growth (112.67%), Bennelong Emerging Companies (77.2%), GQG Partners Emerging Markets Equity (41.4%), Atlas Infrastructure Australian Feeder Hedged (36.5%), and Colchester Emerging Markets Bond I (14.86%).
Lakehouse chief investment officer and co-founder, Joe Magyer, told Money Management his fund’s success came from backing the team’s best ideas, and sticking to their philosophy and process during good and bad times.
Magyer said during the start of the COVID-19 pandemic the fund did a “fair bit of buying” but the team were also early to recognise the impact of social distancing and what that would mean to businesses.
However, he noted that the fund did not jump from theme to theme or moved from growth to value between quarters. Rather, the biggest positions the fund owned were followed well before the pandemic.
“We are growth investors with a strong focus on asymmetric outcomes. We’re always looking for businesses that offer multiple ways to win and few ways to lose. That can look like businesses that are gaining share in growing markets, extremely loyal customers which has a network effect, intellectual property, and strong management teams,” he said.
“We also want to protect ourselves by paying reasonable valuation, understanding points of failure, and trying to skew the odds in our favour with each position.”
Magyer said the team worked on a ‘fascinations framework’ where his investment teams were organised around business models and core investing fascinations which were network affects, loyalty, and intellectual property.
“These are the business models we think have lasting staying power in terms of being able to drive outside returns for investors. We view them not as thematic but truly timeless,” he said.
GQG Partners deputy portfolio manager, Sudarshan Murthy, said his fund had done well over the last three years as they focused on forward looking quality, and due to their diverse team members.
During the global sell-off in March last year, Murthy said the fund curbed losses by their ability to react quickly.
“You don’t want to fall in love if with your stocks. With any new data point you want to look at it afresh. This mind set helps us react faster than others when the external environment changes,” he said.
New funds that were rated 5 Crowns over the three years to 30 December 2020
“Having a diverse team that are able to look at companies from different angles is our secret sauce as it enables us to react fast to changing data points. The culture we’ve built in the investment team is one of openness and intellectual honesty. I’d rather be corrected internally by a colleague than the market.”