Large-cap managers go global
Large-cap Australian equity managers are increasingly positioning their portfolios to not only seize Australian economic growth, but global growth, with over 30 per cent of revenues coming from the US, Zenith concluded.
The 2015 Australian Large Companies Sector Review, which looked at 191 Australian equity large cap funds, showed that despite weak levels of global and domestic growth over the last 12 months, the S&P/ASX300 Accumulation Index returned 10.2 per cent for the 12 months ending 30 April.
The average manager on Zenith's approved product list outdid the index by around 0.3 per cent, net of fees.
Senior investment analyst, Quan Nguyen, said Australian managers were increasingly working in a global setting.
"The globalisation and interconnectivity of markets in general means that the average Australian listed company doesn't just do business in Australia," Nguyen said.
"Where a company is listed versus where a company does business and generates revenues is a concept that the majority of Australian equities managers are fully embracing, particularly given Australian economic growth has been relatively benign."
Zenith compiled the top 10 overweight positions from its rated managers, and deciphered the source of revenues of the holdings by region, and found that in contrast to the S&P/ASX300 index, nearly 20 per cent of revenues were coming from the Asia Pacific, 19 per cent from Europe and 18 per cent from Australia.
In contrast, looking at the S&P/ASX300 index, Australia comprised of the majority of the revenue at 60 per cent, while the Asia Pacific accounted for nearly 10 per cent, USA for eight per cent, and China for six per cent.
AUTHOR
Malavika Santhebennur
Recommended for you
Infrastructure assets are well-positioned to hedge against global uncertainty and can enhance the diversification of traditional portfolios with their evergreen characteristics, an investment chief believes.
Volatility in US markets means currency is becoming a critical decision factor in Australian investors’ ETF selection this year.
Clime Investment Management is overhauling the selection process for its APLs, with managing director Michael Baragwanath describing the threat of a product failure affecting clients as “pure nightmare fuel”.
Global X will expand its ETF range of exchange-traded funds next month with a low-cost Australian equity product as it chases ambitions of becoming a top issuer of ETFs in Australia.
