In a world where the companies that are winning are increasingly taking everything, and leaving the losers (and the average) with less and less, the importance of consistently identifying winners is central to long-term performance.
Exchange Traded Funds, commonly called ETFs, have continued to grow in popularity among Australian investors and for good reason.
In 2020, the total market capitalisation of all funds within the Exchange Traded Product market reached a record $95.2 billion as investors continue to look for new opportunities to grow and diversify their portfolios.
There are various benefits to investing in an ETF including:
- Lower costs
- Automatic portfolio diversification
- Gaining exposure to a specific sector, market, or theme
- The ability to access certain investment strategies offered by fund managers via an exchange
However, identifying and choosing the right ETF to invest into can be a daunting task – there are over 255 Exchange Traded Products listed on Australian exchanges – many of which passively track an index.
Beware the index
Hyperion Asset Management is a growth-style investment manager, and our mission is to protect and grow clients’ capital sustainability over the long term. We believe the best way to do this is to invest into a concentrated portfolio of high quality and disruptive new-world stocks.
In other words, to achieve above average returns, investors need to carefully select and invest into structural growth leaders and avoid old-world stocks which make up a significant portion of most indices and benchmarks.
We have been successfully investing in global equities since June 2014 through our Hyperion Global Growth Companies Fund (Managed Fund) which has achieved 23.5 per cent in annual returns each year after fees – much higher than the industry benchmark of 5.7 per cent.
In February 2020, Bloomberg called it the “Top 1% fund because “Hyperion Asset Management Ltd…Global Growth Companies Fund has returned 28% over the last three years and beat 99% of peers…”.
Consider, if you had invested $10,000 at inception in June 2014, your holding would be worth $40,268^^ as at the end of February 2021, almost double the value of the same investment in the index^.
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. Hyperion was also crowned Overall Fund Manager of the Year at the Morningstar Australia Awards. Good Returns agreed, naming the Hyperion Global Growth Companies Fund Global Equities Fund of the Year for 2020.
The portfolio and its performance are the result of over 10 years of research into listed global businesses which have low levels of gearing, predictable long-term earnings streams, and above-average growth potential.
Our strategy involves rigorous and in-depth quantitative and qualitative analysis which allows us to focus on only the highest quality businesses.
A new year with new opportunities
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 Companies Fund (Managed Fund) as an exchange quoted managed fund, also known as an active ETF, on the ASX.
The Fund lists on Monday 22 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.
The listed fund will have the same fee structure as the unlisted fund which is 0.7% management fee and a 20% performance fee above the benchmark (MSCI World Accumulation Index).
We believe this fee structure is very disruptive in the context of the high base fees of many large, incumbent global managers.
Investors interested in knowing more are encouraged to click on the button below where they can learn more about Hyperion Global Growth Companies Fund (Managed Fund) (ASX: HYGG).
DISCLAIMER – HYPERION GLOBAL GROWTH COMPANIES FUND (CLASS B UNITS)
*Investment of $10k since inception, with all distributions reinvested
**Inception date: 1st June 2014.
^MSCI World Index Gross (AUD).
^^The Hyperion Global Growth Companies Fund was launched in 2014 and has generated significant outperformance for investors. For example, $10,000 invested at inception would now be worth over $40,268 as at the end of February 2021. That same investment in the MSCI World Index is only worth $22,444.
Returns are net of applicable fees, costs and taxes. Past performance is not a reliable indicator of future performance. Data as at 28th February 2021. Due to rounding excess performance figures may not equate perfectly to the difference between Hyperion Global Growth Performance and the MSCI World Index Performance.
Morningstar Awards 2021 (c). Morningstar, Inc. All Rights Reserved. Hyperion Asset Management has been Awarded the Overall Fund Manager of the Year in Australia. Awarded in both the categories Domestic Equities – Large Cap and Domestic Equities – Small Cap as well as nominated for the Global Equities category.
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 firstname.lastname@example.org.
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.