Privately owned Fidelity International’s performance and established long-term track record were winning factors in its success in taking out this year’s Australian Equities Broad Cap category at the Money Management/Lonsec Fund Manager of the Year Awards. Led by Paul Taylor, the Fidelity Australian Equities Fund has taken pole position for its bottom-up, long-term stock analysis approach.
Commending Taylor and his peers, Lonsec said both the fund’s research team and performance were sound examples of quality and experience in the investment industry. “The fund has established a very strong longer-term track record,” Lonsec said. “Taylor is considered to be a quality investor with prior portfolio management and stock analysis experience, both on a global and domestic level. The portfolio manager is supported by a well resourced and highly capable research team responsible for bottom-up stock analysis.”
Indeed, it is the manager’s consistency of performance and aptitude for stock selection that portfolio manager Paul Taylor considers the reason for its success. Since its inception in 2003, the fund has outperformed the market by 4 per cent each year, he says, beating its performance target of 2.5 per cent above the benchmark through savvy stock selection.
“As a bottom-up stock picking firm, we look for great ideas and companies and try to form a 360-degree view of a company we are researching. Typically, we hold between 30 and 50 stocks in the fund, which we believe is important as above that is too close to the market, while below that is not enough,” Taylor says.
He adds that the fund has a holding period of three years, which he considers important from a bottom-up perspective as it provides reasonable market visibility without the faddish trends afforded by a shorter six- to 12-month cycle. Taylor credits the domestic equities team and a strong global network for the success of the fund as well as the stability of the team, a matter he considers a result of the private ownership of the firm.
Runner-up in the category, Greencape Capital, outshone its peers following five years of solid growth. Matthew Hyland, director at Greencape Capital and portfolio manager of the Greencape Broadcap Fund, believes the firm’s consistency over extreme turning points in the market is a reason for its success in this category.
He said: “A fund manager’s ability and processes get tested when there is a sharp turning point in the market. I think our fund stands out because we have a strong commitment to capacity; it is a genuine broadcap fund and we have shown we have the capability to navigate the markets and provide consistency of performance in bull and bear markets.”
Third-placed Goldman Sachs Asset Management attributes three distinguishing features to its winning Australian Equities Wholesale Fund. The first is that its team of nine investment professionals, coupled with the broader global investment team, is responsible for the firm’s US$679.9 billion in assets under management, while the team’s focus on idea-generation and independent thinking is what the firm believes sets it apart from its peers.
The manager also credits its neutral-balanced approach to stock selection and a disciplined approach to managing risk as reasons its team has been able to deliver strong performance results in both up and down markets over the long and short-term.
Dion Hershan, head of Australian equities at Goldman Sachs Asset Management, said: “We believe a style-neutral, balanced approach to stock selection across stock styles and investment horizons allows for strong performance results over the short and long-term and through different market cycles.”
