Hyperion’s lead portfolio manager, chief investment officer and managing director, Mark Arnold, and lead portfolio manager and deputy chief investment officer, Jason Orthman, said the fund’s portfolio was ‘really well placed’ getting through COVID-19, helped by the strong view to remain focused on finding modern market leaders with structural tailwinds.
“We believe as we come out of this [COVID-19] some of those software-placed businesses and healthcare-related businesses will do particularly well,” they said.
“Our portfolios are really well placed after we get through COVID-19. We think we are returning to a low growth competitive disruptive world and we believe modern businesses with strong value propositions will grow a lot higher rates.
“As the vaccine rollout continues and we come out of COVID-19 and go back to a normal grind we are really optimistic how the portfolios are placed particularly over the coming years.”
The fund also added Afterpay to its portfolio last year and tapped into the buy now, pay later (BNPL) category which overall performed very well, particularly in the second half of 2020.
“If you look at the Australian growth companies – we think businesses like CSL and Cochlear will continue to lead in their markets and we think they will do really well as the world normalises,” the managers said.
“Those modern software and healthcare businesses are going to do well for structural fundamental reasons as the world gets through COVID-19.”
Arnold noted that high-quality, structural growth businesses tended to outperform over the long term and his fund would continue to focus on the businesses that were undervalued by the market in broader terms.
“The market focuses on short-term and they don’t really look out longer-term and identify the businesses that will give double-digit returns and consequently those sorts of businesses tend to be undervalued. We try to identify those businesses and take advantage of that,” he said.
