Move away from bank platforms boosts Pengana fund
Exposure to wealth platform stocks have helped the Pengana Emerging Companies fund report positive performance this year as smaller players outpace traditional bank-owned platforms.
In a monthly update, the firm said it held exposure to Netwealth, Praemium and HUB in the $716 million fund.
Over one year to 23 February, 2021, shares in HUB had risen by 110% while Netwealth had returned 77% and Praemium had risen 68%.
While none of the companies sat in the fund’s top 10, Praemium had contributed 20% to monthly performance while HUB contributed 15% and Netwealth, 8%.
“Our key positive contributions included the wealth platform stocks HUB, Praemium, and Netwealth. These companies released their recent fund flow data which confirms an elevated level of switching from the traditional bank-owned platforms towards these newer more nimble providers,” it said.
“The two larger players (HUB and Netwealth) rose 90% to 100% during 2020 reflecting this trend which we believe has a long time to play out.”
Last week, Money Management reported how these three firms were sitting atop a list of preferred platforms compared to a decade ago, when the top three were all bank platforms such as CFS and Macquarie.
Share price performance of HUB, Netwealth and Praemium over one year to 23 February 2021
However, performance of the Pengana Emerging Companies fund was dented by exposure to property trust Charter Hall which fell 7% as the market swung from defensive assets to cyclical ones.
“We are comfortable with our portfolio’s mix of well-priced high growth stocks and selective cyclical companies where we believe the valuation has not yet factored in a recovery. Among the cyclical stocks, we favour sectors such as mining services over retail, which we believe is showing signs of overestimating the sustainability of current trading conditions,” the management said.
The fund returned 3.3% over one year to 29 January, 2021, according to FE Analytics, versus returns of 13.1% by the Australian small and mid-cap sector, within the Australian Core Strategies universe.
Performance of Pengana Emerging Companies versus Australia small and mid-cap sector over one year to 29 January 202
AUTHOR
Laura Dew
Recommended for you
There is one specific risk that is a significantly higher concern for financial services directors compared to companies overall and is impacting their risk appetite, according to the AICD.
Global fund managers are shunning bonds, with the asset class seeing the largest drop in allocations in more than 20 years.
Australian Ethical has seen its funds under management reach $10 billion, driven by organic customer growth and superannuation contributions.
Financial advisers will have access to private equity investments run by WTW for the first time as it launches a pooled fund to provide savers with access to traditionally institutional assets.
