Choice pickings lead to victory
Picking stocks in high quality companies in any sector that have sustainable earnings and dividends, and are able to generate their own internal growth are vital in the Australian equities broad cap space.
That philosophy saw State Street Australian Equity Fund grab the top prize in the Australian Equities (Broad Cap) category.
State Street Global Advisors' senior portfolio manager, Toby Warburton, credited the win to being benchmark-unaware, where they offer the ability to buy stocks in any sector in the Australian market where the weight is not determined by the benchmark.
"If we want to buy stocks that we think will offer good returns, on an adjusted-risk basis, what that means is we're trying to deliver strong returns to the investors' objective of growing their assets.
"But we're taking account of total volatility, total risk of their portfolio, and stocks we buy rather than risks relative to benchmarks," he said.
The firm will pick up some risks but only if they are adequately compensated by return.
For finalist Greencape Capital, 2014 marked the eighth consecutive year of outperforming the market, which it attributed to the flexibility inherent in the portfolio.
"While the Greencape High Conviction fund typically holds 90 per cent of the portfolio in the first 30 stock names, which provides you with a good level of concentration, it can hold up to another 10 stocks in the tails of the fund, which brings with it all kinds of flexibility," Greencape director, David Pace, said.
Second finalist IML's strategy is to look for companies that can weather the storm of tough economic conditions and deliver earnings growth and strong dividends.
"We look for good quality companies that are reasonable value. We don't buy cheap companies just for the sake of buying cheap companies," investment director, Anton Tagliaferro, said.
AUTHOR
Malavika Santhebennur
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