Zenith Investment Partners has identified various asset managers which have performed strongly and those which have struggled in its managed accounts over the last quarter.
According to Shailesh Jain, senior investment consultant at Zenith Investment Partners, share markets during the past quarter were ready to look past headwinds and instead focus on the resilience of the economy and easing inflation.
In a webinar, Jain identified GQG and L1 Capital International as two active managers with strong performance despite market narrowness. On the flip side, Barrow Hanley struggled from being a fund manager with a value bias.
On 17 August, GQG Partners announced net flows of US$6.2 billion in the first half of 2023. The firm’s funds under management (FUM) grew from US$88 billion ($137 billion) at the end of December to US$104 billion.
L1 Capital was a winner of the Innovation Award of the Year at Money Management’s Fund Manager of the Year Awards for its L1 Capital Catalyst Fund, which returned 6.9 per cent versus returns of 1.2 per cent by the ASX 200 over the six months to 31 July.
Looking at the performance of large-cap versus small-cap equities, 2022 was a difficult year for small-cap managers during a period of underperformance, but the pair noted 2023 has seen stronger results.
Jain said: “2022 was a difficult market for the likes of Bennelong and our small-cap managers. Fast forward to 2023, the first six months have been very strong for these managers. Bennelong ex-20 has had a strong recovery in the first six months and so has Eiger, which is another small-cap manager that has had tremendous performance.
“Invesco, which is a large-cap manager, has had a tough quarter driven by a bias to momentum factors in choppy markets which haven’t played out well in the current type of market environment.”
Over the six months to 31 July, the Bennelong ex-20 fund returned 5.4 per cent versus 3.5 per cent by its benchmark of the S&P/ASX 300 Accumulation Index.
The Eiger Australian Small Companies Fund returned 8.9 per cent over one year to 31 July versus returns of 0.8 per cent by the S&P/ASX Small Ordinaries Accumulation Index.
On the fixed income side, Steven Tang, head of portfolio solutions at Zenith, highlighted outperformance by PIMCO and Western Asset.
“Given the market backdrop, it’s been a challenging environment for the fixed income part of our portfolio. On the positive side, our bond managers in PIMCO and the Western Asset Australian Bond Fund have outperformed these broad indices,” he said.
Over one year to 30 June, the Western Asset Australian Bond Fund returned 1.9 per cent versus returns of 1.2 per cent by the Bloomberg AusBond Composite 0+ Year Index.
Tang continued: “We’ve been gradually increasing our allocation to high-quality government bonds in recognition that we thought the path of interest rates wouldn’t be smooth.”
