Tech scrutiny should be viewed as tailwind: Hyperion
Big technology firms may be coming under regulatory scrutiny but Hyperion Asset Management are hopeful there are more tailwinds than headwinds.
Facebook and Tesla were included in the top five largest holdings of the Hyperion Global Growth Companies fund and had a 37.8% weighting to technology and 18.6% to communication services, which included Facebook and Alphabet.
Facebook, in particular, was coming under scrutiny by US regulators over issues such as data privacy and anti-competitive behaviour. Meanwhile, Tesla was being watched for car crashes of its self-driving vehicles by the National Transportation Safety Board.
Chief investment officer (CIO), Mark Arnold, said: “The regulatory risks are manageable and have been reducing over time. We are not concerned about that and the businesses are willing to engage with the regulator to improve their services.
“They are not using their powers to affect pricing so it is hard for the regulator to attack them.”
Jason Orthman, deputy CIO, said: “In newer industries like Tesla, they are more regulatory tailwinds than headwinds as the Government is supportive of sustainable energy through electric vehicles especially in the US and Europe. We think the headwinds have reduced significantly.”
The Hyperion Global Growth fund was launched as a listed active exchange traded (ETF) fund in March and the pair said this had helped broaden the reach of the vehicle. The source for assets under management, which had reached $400 million, was 50% from full service brokers, 25% from financial planners and 25% from retail online brokers, compared to mostly financial planners for the unlisted version.
“It has really democratised the product, traditionally most of our flows came from financial advisers, they were really the gatekeepers, but the active ETF allows us to attract more retail flows via mum and dad investors who are using platforms like CommSec,” Orthman said.
However, the firm said they were currently not considering launching an active ETF version of its Australian Growth Companies or Small Growth Companies.
“We are not considering it at this stage, our focus is the Global Growth Companies fund which has a strong track record and are focused on getting assets to rise in that fund,” Arnold said.
AUTHOR
Laura Dew
Recommended for you
Two former senior Global X employees have launched their own ETF provider, ETF Shares, focused on offering index ETFs for advisers and retail investors.
With GCQ Funds Management and Lakehouse Capital making their recent ETF debuts, the two fund managers unpack why financial advisers are essential to their respective launches.
ETF provider Global X is set to launch its latest ETF, focused on artificial intelligence infrastructure.
Index provider MSCI has unveiled two measures to make it easier for financial advisers and wealth managers to access transparent insights into private assets.
