Short-term views create investment opportunities for Loomis Sayles
Short-term views can create volatility, which can lead to good opportunities for investment, according to the US-based fund manager Loomis Sayles.
The company partnered with distributor IML late last year and launched the Loomis Sayles Global Equity Fund to retail investors in Australia. This offered local investors a wide geographical spread of companies picked by the Loomis Sayles investment team.
The increased focus on short-term views, both in the news and among investors, were a benefit for the fund, said co-manager Eileen Riley, as it allowed the firm to allocate capital to new positions or add capital to ideas that were already implemented in the portfolio.
The fund’s co-manager, Lee Rosenbaum, also explained how the fund leveraged the competitive advantage period (CAP) analysis and how CAP related to the alpha drivers of the portfolio.
“The competitive advantage period (CAP) – which we define as the number of years where we can explicitly express our assumptions about the future progress of a business based on our understanding of a company’s quality and ability to grow intrinsic value – is an integral part of our assessment,” Rosenbaum said.
“It allows us to add another layer of precision to our valuation and, in general, higher quality companies have a longer CAP.
“But CAP is just one input. To get the bigger picture, we need to look at what we call the alpha drivers and where CAP fits in with them.”
This would include a further analysis of the company’s quality, intrinsic value growth and valuation.
“By analysing companies in this way, we have consistency whether we’re looking at a pan-Asian insurance company (AIA) or a Swiss software company (Temenos),” the manager noted.
The Loomis Sayles Global Equity fund has returned 22.5% over one year to 11 September, 2019, according to FE Analytics, versus returns of 12.7% by the ACS Equity-Global sector.
Recommended for you
Perpetual has seen AUM rise 6 per cent in the last quarter but the departure of a longstanding JOHCM fund manager led to outflows of $2.2 billion from his strategy.
In the latest Meet the Manager profile, Money Management speaks with Michael Skinner, founder and managing director at Blackwattle Investment Partners.
Global fixed income fund Bentham Global Opportunities has been added to several major platforms, enabling it to be accessed more easily by financial advisers.
Following yesterday’s news about First Sentier Investors closing four investment teams, a second global asset manager has announced it is closing its only dedicated Australian fund.