It may be relatively new on the funds management scene, but Macquarie Professional Series’ IFP Global Franchise Fund has certainly made a name for itself in the Australian market.
The fund has knocked Schroder Investment Management off the top of the Global Equities (Broad Cap) category for this year’s Money Management/Lonsec Fund Manager of the Year Awards, thanks to its combination of experience, motivated personnel and delivery.
Macquarie Professional Series head of distribution Adrian Stewart said he has been very pleased with the level of support the fund has received across the financial planning industry so far.
The fund is managed by Independent Franchise Partners in London, a firm that was founded in 2009 by the lead portfolio manager Hassan Elmasry and four others.
The investment team had been working together on the same strategy at Morgan Stanley Investment Management for a number of years prior to establishing their own firm.
“The fund and group, Independent Franchise Partners, have been identified as having a very strong competitive advantage in people, process and product design,” Stewart said.
According to Stewart, this value-biased and benchmark-unaware strategy uses bottom-up research to identify quality companies with an enduring competitive advantage (such as brands, patents and licences), which are capable of supporting high return on capital.
The portfolio is relatively unconstrained in relation to region or sector allocation, is quite concentrated at 20 to 40 stocks and has a turnover of less than 20 per cent per year since inception, said Stewart.
“Being benchmark-unaware allows them to focus on buying quality companies. They’re not looking through a filter of a benchmark or allocations to countries, regions or sectors,” he said.
According to the Lonsec judges, the fund is most suitable for investors who are willing and able to tolerate a portfolio that can vary significantly from the traditional global equities benchmark.
“Moreover, IFP is committed to preserving the characteristics of the strategy and capacity is tightly managed,” the judges added.
A newcomer to the category, BNP Paribas’ MFS Global Equity Fund came in as a finalist for its consistency in investment process and team, as well as its long-term outperformance of the benchmark.
Co-portfolio managers David Mannheim and Roger Morley run the fund, backed by an experienced team of 50 stock analysts across Boston, London, Mexico City, Singapore, Sydney and Tokyo.
The fund’s investment process focuses on identifying stocks that have an appropriate valuation and are expected to deliver above-average returns relative to the benchmark.
But the features of the fund that stood out most were its low turnover and the ability of managers to take a large active position in stocks that present appropriate opportunities.
Also new to the category is the Goldman Sachs International Equity Fund, which is managed by Wellington Management Company out of Boston, United States.
The five-person team is led by Nicolas Choumenkovitch, with each member covering specific industries.
The fund takes a “unique assets” and “pure play” investment approach, which involves looking for companies with a return on capital that is underappreciated by the market, as well as companies that have assets that are hard to replicate. The fund can also invest up to 20 per cent of the portfolio in emerging markets companies.
This, along with its core, style-neutral approach, has resulted in consisted performance in both up and down markets.
