Advised and non-advised self-managed superannuation fund (SMSF) clients could be a target market for the US boutique active manager as it seeks to make Australia its second-largest market.
In a conversation with Money Management, Laird Abernathy, managing director for Australia and New Zealand, said the firm was seeking to build a significant presence in Australia and that it was working “as normal as we can” to progress its plans.
Currently, the Australian market represented $4.5 billion of the firm’s assets under management, which was mostly in institutional assets.
A potential demographic targeted by the firm was the advised and non-advised SMSF market and Abernathy said the firm could launch active exchange traded funds (ETFs) in the future for this market.
“We are trying to go ahead with our plans, both in the institutional and wholesale space, and operate as normal as we can,” Abernathy said.
“Our key focus is on the wholesale market, we are only just at the start of that journey and are building the brand and we think it would be complementary for the SMSF market.
“The non-advised market would be a harder market to crack, but definitely advised ones, and we think it would broaden our client base.”
The firm ran a $426 million Global Equity fund and a $136 million Emerging Markets Equity fund, which were managed by the firm’s US-based investment team led by portfolio manager Rajiv Jain, and Abernathy said this was ideal environment for the funds to perform. He added active managers who were seeing underperformance would find it harder to hide nowadays.
“Our funds are good at protecting to the downside but they have also done well in the recovery bull run since March. We are also very comfortable making changes to the portfolio if the data changes,” Abernathy said.
“There has been lots of volatility and if you are not performing as an active manager in this environment then something is very wrong as this is the ideal environment for active management and offers an opportunity to outperform.
“This is a real test for boutiques and performance is even more important than ever. If you have already had a run of underperformance then this period will be really difficult and we could see fund closures.”
According to FE Analytics, within the Australian Core Strategies universe, the GQG Emerging Markets Equity fund had returned 12.6% over one year to 31 August, 2020, while the Global Equity fund returned 17.6%. This compared to 0.4% and 5% average returns by their respective emerging market and global equity sectors over the same period.
Performance of the GQG Global Equity fund versus global equity sector over one year to 31 August 2020
