Australia, 13 July 2020 – Mercer’s Australian Shares Investment Manager Performance Survey released today reveals that investment managers who stuck to longer term investment strategies came out on top despite volatile markets caused by COVID-19.
Healthcare and IT allocations were the key contributors to positive performance in the last year, with Energy and Financials as the major headwinds. The Value versus Growth conundrum is a global phenomenon and Value focused strategies e.g. low P/E stocks, continued to frustrate investors over the quarter and one-year horizon, while Quality themes, such as companies with low levels of debt performed very well during a tough period.
Ronan McCabe, Head of Portfolio Management for Mercer in the Pacific said, “The COVID-19 pandemic and market reaction has been unprecedented. While many stocks in some sectors have been adversely affected, stocks in Healthcare and IT have performed very well as the market has focused on healthcare solutions, and a favourable view towards online and remote working products and services. It is reasonable to expect this trend to continue for the foreseeable future.”
“Managers that have a Quality/Growth bias more generally performed strongly over the past 12 months. Quality characteristics such as companies focusing on the efficient use of capital and strong sales momentum have performed relatively well in this tough period, and has benefited portfolios with an emphasis on these themes,” he observed.
Mr McCabe also noted, “Investment styles often explain a large part of the relative performance of investment managers, and this was the case in this recent period. We have seen time and time again that the benefits of active management are most evident in more challenging markets and this continues to be the case.”
Australian Shares – All Funds
5 upper quartile funds in the past 12 months to end June 2020 (alphabetical order)
Fund |
Style |
Contributors to benchmark outperformance |
Bennelong Concentrated Equities |
Quality/Growth |
· Consumer Discretionary · Health Care |
ECP Asset Management All Cap |
Quality/Growth |
· Information Technology · Consumer Discretionary |
Greencape Broadcap Fund |
Quality/Growth |
· Consumer Staples · Materials |
Hyperion Australian Growth |
Quality/Growth |
· Health Care · Information Technology |
Platypus Australian Equities |
Quality/Growth |
· Health Care · Information Technology |
5 lower quartile funds in the past 12 months to end June 2020 (alphabetical order)
Fund |
Style |
Contributors to benchmark underperformance |
Allan Gray Australian Equity |
Value |
· Energy |
Dimensional Australian Value |
Value |
· Financials · Energy |
Lazard Select Australian Equity |
Value |
· Financials · Energy |
Martin Currie Australia Real Income |
Value |
· Real Estate |
Nikko AM Australian Share Concentrated |
Value |
· Financials · Energy |
Key Findings
-ENDS-
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