Maple Brown Abbott a winner on bricks and mortar
Underweighting international equities and overweighting property trusts has paid off for value managerMaple Brown Abbott(MBA), which has taken line honours in the multi-sector category.
“Our performance has much to do with where we were exposed this year. We were heavily overweight in property trusts and that was the best performing sector by a long way. We were also significantly underweight in international equities,” director Garth Rossler says.
With only 15 per cent exposure to international equities compared to the industry average of around 27 per cent, Rossler says MBA took the view a long time ago that overseas equities were more than fully priced.
However, MBA has started, albeit cautiously, to put money back into international equities, but says a move to an average industry exposure is uncertain as is an overweight position in property trusts.
“We think the valuations have improved, hence we are putting money back into international equities and we expect to put more money in going forward, if they continue to improve.”
“We are also still in property trusts at the moment and if things in the investment market continue to be tickled, property trusts are likely to hold up. Our base case is the investment outlook is fraught with uncertainty and some degree of caution is warranted.”
Assirt’s head of research Caroline Saunders says MBA did well because of its very low weighting to international equities but also because of its capable management of Australian equities.
“Its management of Australian equities is very good,” she says.
“I think its asset allocation is really the secret behind its success.”
MBA has done well out of stocks like Lion Nathan, Orica and particularly Goodman Fielder, which according to Rossler, was “the largest single contributor over the last 12 months”.
MBA was 96 basis points above benchmark in Australian equities over the past 12 months and 192 basis points above benchmark in property. In international equities, MBA was 48 basis points above benchmark.
Saunders says placegetterUBS Global Asset Managementdid well out of fixed interest and Australian equities.
“It has done well because all of those sectors have done well,” she says.
Barclay Global Investors(BGI), which came third, has produced above benchmark returns using a true style neutral approach.
“Its tactical allocation has worked very well for it in the past year or so,” Saunders says.
“BGI is just very good at managing money in a quant style.”
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