Portfolio manager profile: Paul Cuddy, Bennelong Australian Equity Partners
Bennelong Australian Equity Partners: Launched in July 2008 by co-founders Paul Cuddy and Mark East, as a joint venture with Bennelong Funds Management.
Experience: I joined the industry in 1989 working as a junior analyst for a large institutional investment management group. Over the past two decades I have worked in various roles including head of equities, portfolio manager and investment analyst.
Investment philosophy: Stock prices are driven by earnings. The greatest returns come from companies that can deliver positive earnings surprises relative to market expectations. Investing in high quality companies helps achieve that objective while minimising the risk of negative earnings surprises.
One of your best calls: Over the past year we have benefited from an overweight position in the mining services sector. Campbell Brothers provides testing services to the mining, environmental and industrial sectors. It is leveraged to increased mining exploration and production, as well as some recent acquisitions that are creating further shareholder value. The stock has performed very well as the company has delivered strong results relative to peers and the broader market.
Outlook for the year ahead: Equity markets are struggling with the ‘two-speed economy’ that is dominating headlines. Many domestic industrial companies are facing tight monetary policy, increasingly cautious consumers, and a strong Australian dollar, and rising costs aren’t being offset by revenue gains. Conversely, the outlook for resources-related companies is more positive, with many companies well positioned to deliver positive earnings upgrades over the next couple of years.
Fund positioning: The portfolio is overweight high quality stocks that we believe will deliver positive earnings surprises over the foreseeable future. We like selected mining services companies, together with some high quality industrial companies that we believe will buck the downward trend of the ex-resources sector over the remainder of this year and into early 2012.
Recommended for you
In this week’s episode of Relative Return Unplugged, AMP chief economist Shane Oliver joins the show to unravel the web of tariffs that US President Donald Trump launched on trading partners and take a look at the way global economies are likely to be impacted.
In this episode of Relative Return, host Laura Dew is joined by Andrew Lockhart, managing partner at Metrics Credit Partners, to discuss the attraction of real estate debt and why it can be a compelling option for portfolio diversification.
In this week’s episode of Relative Return Unplugged, AMP’s chief economist, Shane Oliver, joins us to break down Labor’s budget, focusing on its re-election strategy and cost-of-living support, and cautioning about the long-term impact of structural deficits, increased government spending, and potential risks to productivity growth.
In this episode of Relative Return, host Laura Dew chats with Mark Barnes, head of investment research, and Catherine Yoshimoto, director of product management, from FTSE Russell about markets in Donald Trump's second presidency and how US small caps are faring compared to their large-caps counterpart.
