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Active, high conviction investing generates big returns

The world is becoming an increasingly winner-takes-all environment and we therefore believe that investing into high-quality businesses with global addressable markets is essential for generating above average returns in the future. 

There have been several fundamental changes to the economic and business environment over the past two decades that have substantial implications for the success of traditional value styles of investing.

The changed environment also has negative implications for passive investment.

Since the GFC the world has experienced lower levels of nominal GDP and corporate profit growth with the emergence of the following headwinds:

  1. lower population growth rates and ageing population;
  2. high debt levels in most major economies;
  3. hollowing out of the middle class and rising wealth and income inequality;
  4. increasing awareness of environmental constraints and disruption; and
  5. increasing technology-based disruption of old-world business models and human capital markets.

While the tailwinds that saw the rapid economic growth of the decades prior to the GFC have dissipated, the economic headwinds have strengthened, and the emergence of the COVID-19 pandemic has only exacerbated these headwinds. This has accelerated the disruption which is occurring in many industries.

Put another way, we believe most businesses included within indices and benchmarks will continue to lose further market share to a few elite businesses which have very strong value propositions under this new economic framework.

Equity returns are driven by the few – not the average

Hyperion Asset Management is a growth-style investment manager, and our mission is to protect and grow clients’ capital sustainability over the long term.

This is what we have been doing since the inception of the Hyperion Global Growth Companies Fund in 2014 and have achieved 23.5 per cent in annual returns each year after fees – much higher than the industry benchmark of 5.7 per cent.  

Last year, the Fund returned 46 per cent after fees, with Hyperion Asset Management topping “…three Morningstar categories – Australian Equity Large Cap, Australian Equity Small/Mid cap and Global Equity Large Cap – delivering returns well above the index” according to Morningstar’s round up of the best and worst performing equity funds under Morningstar coverage for 2020. Good Returns agreed, naming the Hyperion Global Growth Companies Fund Global Equities Fund of the Year for 2020.

How did we do this?

We use our proprietary research process and leverage the experience of our highly skilled analysts to identify high quality and disruptive new-world stocks – companies which can grow regardless of the larger macroeconomic environment.

Hyperion Asset Management has achieved superior returns by screening out all but the highest-quality companies to create a diversified portfolio.

Our strategy involves rigorous and in-depth quantitative and qualitative analysis and the Fund typically consists of only 15-30 stocks invested on either the World Federation of Exchanges or the Federation of European Securities Exchanges.

Unprecedented demand

A new year brings with it plenty of accompanying opportunities, especially for those seeking long-term investment growth from high quality, new-world businesses outside of Australia.

While we expect growth to be subdued in certain sectors and industries in 2021 and beyond, we believe our portfolio is well positioned to continue its strong outperformance as it has done since 2014.

Due to strong levels of interest from investors and advisers, it is with great enthusiasm that we announce the launch of the Hyperion Global Growth Fund as an exchange quoted managed fund, commonly also called an Exchange Quoted Managed Fund (EQMF) on the ASX.

The Fund is expected to list in late March with ticker ASX: HYGG and will provide investors and advisers with the option to access via the ASX the same units as Hyperion Asset Management’s $1 billion global unlisted fund.

Investors interested in knowing more are encouraged to click on the button below where they can preregister their interest and stay updated about the listing.

This article was prepared by Pinnacle Investment Management Limited (ABN 66 109 659 109 AFSL 322140) (‘Pinnacle’) as distributor of the Hyperion Global Growth Companies Fund ARSN 611 084 229. It contains general information only, for multiple distribution, and has been prepared without taking account of any person’s objectives, financial situation or needs. It is not intended as a securities recommendation or statement of opinion intended to influence a person or persons in making a decision in relation to investment. Any persons relying on this information should obtain professional advice before doing so.  Before making an investment decision, you should consider the relevant offer document to be available at www.asx.com.au and assess whether the product is appropriate given your objectives, financial situation or needs.  While Pinnacle believes the information contained in this communication is reliable, no warranty is given as to its accuracy, reliability or completeness and persons relying on this information do so at their own risk. Subject to any liability which cannot be excluded under the relevant laws, Pinnacle disclaim all liability to any person relying on the information contained in this communication in respect of any loss or damage (including consequential loss or damage), however caused, which may be suffered or arise directly or indirectly in respect of such information. Any opinions and forecasts reflect the judgment and assumptions of Pinnacle and its representatives on the basis of information at the date of publication and may later change without notice. Any projections contained in these article are estimates only and may not be realised in the future. Past performance is for illustrative purposes only and is not indicative of future performance.


Disclaimer – Hyperion Asset Management Limited (‘Hyperion’) ABN 80 080 135 897, AFSL 238 380 is the investment manager of the Funds. Please read the Product Disclosure Statement (‘PDS’) in its entirety before making an investment decision in the Funds. You can obtain a copy of the latest PDS of the Funds by contacting Hyperion at 1300 497 374 or via email to investorservices@hyperion.com.au.

Hyperion and Pinnacle Fund Services Limited believes the information contained in this communication is reliable, however no warranty is given as to its accuracy and persons relying on this information do so at their own risk. Any opinions or forecasts reflect the judgment and assumptions of Hyperion and its representatives on the basis of information at the date of publication and may later change without notice. The information is not intended as a securities recommendation or statement of opinion intended to influence a person or persons in making a decision in relation to investment. This communication is for general information only. It has been prepared without taking account of any person’s objectives, financial situation or needs. Any person relying on this information should obtain professional advice before doing so. To the extent permitted by law, Hyperion disclaim all liability to any person relying on the information in respect of any loss or damage (including consequential loss or damage) however caused, which may be suffered or arise directly or indirectly in respect of such information contained in this communication.

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