GOLD WINNER HYPERION
The world of digital disruption is proving fertile ground for a fund manager with an eye on the long term.
Domestic shares have always formed the back-bone of Australian investment portfolios. Hyperion’s Australian Growth Companies Fund has blitzed the field this year, boasting a one-year return of 18.64% (to June 30), a three-year return of 12.45%pa and a five-year return of 12.52%pa. The one-year return is especially impressive, given the market volatility wrought by Covid-19.
“2020 has been a challenging year to say the least, so being able to provide our clients with positive returns in their investment portfolios, especially when they may be experiencing financial losses in other areas, has been very motivating and rewarding,” says Mark Arnold, Hyperion’s chief investment officer and managing director.
“This award not only recognises our work this year, but it recognises our ongoing commitment to protecting and growing our client’s capital in both strong and weak economic environments over the long term.”
The fund manager does this by investing in a relatively small number of companies for a long time – 10 years on average – with the aim of outperforming the S&P/ASX 300 Accumulation Index over a five-year horizon.
And while it uses historical performance data, it does so with an eye to the future.
“Many investors seem to stick to what we would describe as ‘old world’ businesses such as traditional retailers, banks, commodity-based companies, utilities, auto and oil companies,” says lead portfolio manager Jason Orthman. “However, at Hyperion we believe in a disrupted world. This means that we look at developing sectors and structural trends, and we back the leaders in these industries.”
The AB Managed Volatility Equities Fund stands on the second step of the podium this year. It also seeks to outperform the S&P/ASX 300 Accumulation Index with a focus on smoothing out returns by minimising volatility in its holdings.
In third spot is the SGH Australia Plus Fund. Unlike the other two, this one gives no mind to index tracking, instead focusing on selecting high-quality companies of mid and large capitalisation.
While the one-year performance of the minor placings is not in the same league as the Hyperion result, it’s a great reminder of how the Best of the Best managed funds awards work. Funds are assessed not only on their performance but how they manage their investment risk or how they most reliably protect your capital.
Rainmaker information assesses factors such as how much a fund’s performance changed month to month; how much and how often it went down versus up compared with the market and its peers; and by assessing which funds get the highest returns per unit of risk.
This article was originally published in Money Magazine (print).