Credit Suisse proves international forte
It was primarily effective stock picking that enabledCredit Suisse Asset Managementto outperform its rivals and take out theMoney Management/Assirt Fund Manager of the Year Award for international equities.
Credit Suisse managed to snare the award over runners-up Dimensional Fund Advisors andBNP Paribas Investment Management.
Head of research at Assirt Caroline Saunders says Credit Suisse, which outsources its stock selection to fund manager Capital International, has experienced the benefits of good stock picking over the past year.
Credit Suisse head of retail funds Brian Thomas says he has worked closely with Capital International since the fund’s inception in Australia nine years ago, and it has proved to have a consistent and effective process.
Thomas says he thinks the strength of Capital has been its ability to look at companies in different countries and judge them on their individual merit and value, rather than by regional economies and growth.
Saunders says Credit Suisse also hedges a proportion of its portfolio, and with the dollar moving the way it has this element has set them apart from other Australian international share managers who do not hedge.
Thomas agrees that the value-add of the year 2002/03 has definitely been active currency hedging, which has given a boost to the performance of the international fund.
According to Thomas, while he is pleased to win the international category, the whole sector has suffered over the past few years and though the fund has performed above index, that has not pushed it into positive territory.
As a result of this market downturn, Thomas says defensive stocks have become a bigger part of the funds stock portfolio as Capital has changed the fund to suit the times.
Thomas says there is still a tremendous opportunity for growth in the international equities sector and that investors should be viewing it with a long-term perspective as the cycle will turn around.
The future trend will be for more investors to view equities and portfolios in a global sense, according to Thomas, and though negative markets have slowed down that trend, “you can’t hold back the tide of globalisation”.
Thomas says that in every single financial year in gross terms since the fund’s inception nine years ago, it has exceeded the benchmark through a consistent process.
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