Prime Value backs strong tailwind for Equity Trustees
Prime Value Asset Management has increased its weighting to Equity Trustees as it believes the company has strong structural tailwinds behind it.
Speaking to Money Management, Richard Ivers, manager of the Prime Value Emerging Opportunities fund, said the fund held Equity Trustees for several years but had increased it on share price weakness recently to a 3.7% allocation.
Shares in Equity Trustees had fallen 3% since the start of the year versus returns of 10% by the ASX 200.
“Shares have fallen from 30 cents to 25 cents but the fundamentals are still strong and have got stronger, there is a strong structural tailwind behind it,” Ivers said.
“The firm is one of the top two players in the space, alongside Perpetual, and are doing positive things to try to grow in the real asset space. The trustee space is very sticky and there is strong momentum and the potential to make acquisitions.
“The big risk for the firm is market exposure as this will impact the revenue but we think that is implied in the stock price. You are getting quality, growth and value in one which is rare so it is a standout stock.”
Meanwhile, he said markets were likely to see the start of rising rates next year after many years of low rates which would impact investors’ portfolios but, he said, his fund was less exposed to companies which were exposed to rising rates.
“Next year we expect to see rising rates in the US after years of low rates so what has worked previously won’t necessarily work next year. You will have to be nimble.
“The Reserve Bank of Australia will lag and be slower but the Federal Reserve could make an announcement imminently, that has been signposted. But that is dependent on inflation and the Fed has implied that rising inflation will be around for a while and is no longer ‘transitory’.”
AUTHOR
Laura Dew
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.
