Independently owned boutique manager Integrity Investment Management has secured the top spot in the Australian Equities (Broad Cap) category for the second year in a row.
Lonsec praised the manager’s flagship Australian Share Fund for its core style, large cap biased offering which has delivered strong relative returns versus its benchmark and peer group over the course of 2009.
The Australian equities large cap team is led by head of equities and managing director Paul Fiani, and is considered to be well credentialed with relevant experience managing equity portfolios throughout various market conditions.
Lonsec said the team has remained highly stable since its inception, and in 2009 the manager expanded its team size and breadth of research via the appointment of dedicated small cap portfolio manager Glenn Bertram.
Although the research house said Integrity was still young and the team smaller than its peer group average, it praised Integrity’s investment process, saying it was clear, well structured and had been tested through a full market cycle.
It said it considered “continuity in people and process to be an important consideration for boutiques, because it helps align the values and investment beliefs of the investment staff”.
Fiani says the firm is well disciplined in its investment approach and stressed the team at Integrity drew on the long-term nature of their business relationship.
“For the past year it has been a case of more of the same. We have an experienced investment team and a disciplined execution of our investment process.
"The last year has been very challenging, and one of the critical things to our success has been that we were defensively positioned when the market bottomed in March 2009. From there, we went the right way and got more aggressive,” he said.
Lonsec noted the fund returned 29.4 per cent over the year to October 2009, pleasingly outperforming both the benchmark by 7.4 per cent and Lonsec peer group average by 5.6 per cent.
“The fund’s strong performance to date is a testament of an exceptionally well executed investment process and an experienced investment team.
"The manager’s valuation discipline and focus on investing in quality steered the manager away from sub quality stocks heavily sold down by the market earlier this year,” the research house said.
The two other contenders in this category were Perennial Investment Partners and UBS Global Asset Management, which also performed well in the Australian Equities (Broad Cap) sector.
“Last year we outperformed the ASX 300 by 11.2 per cent and our outperformance over the last couple of years has overwhelmingly come from stock selection.
"It has been well spread across many stocks and almost all sectors of the market,” says Simon Shields, head of Australian equities at UBS Global Asset Management.
John Murray, managing director at Perennial Value Management, says a strong focus on capital preservation is the key to its success.
He says: “More than half the battle is won by avoiding the big, bad mistakes and I would like to think that the sheer depth of our research effort has served our investors very well in this regard.
"In 2009, we identified a number of high quality companies whose share prices had been torched and the subsequent re-rating of this cyclical group is what has driven our results over the last 12 months.”
