Stock pickers fly high
“It’s been a tricky year in stocks, and it’s definitely been a stock picker’s market,” Platinum Asset Management international equites manager Toby Harrop says.
Platinum Asset Management is this year’s winner of theMoney Management/Assirt Fund Manager of the Year international shares category.
According to Harrop, Platinum’s process of investing stock by stock and paying attention to companies not in the spotlight makes its investment approach unique.
“The primary investment process is to look at companies where the market isn’t focused, so instead, we look at those stocks that are neglected. Neglect is our catchphrase, and staying away from the heat of the crowd is our plan,” he says.
Platinum’s international equity portfolio is split into a 40 per cent allocation to Europe, 15 per cent to the US, 15 per cent to Japan, approximately 10 per cent to emerging markets and the remainder in cash.
Assirt agrees with the fund manager’s assessment of its strengths.
“The main contributor to Platinum’s investment performance has been positive stock selection within the portfolio’s long positions. Short selling has also contributed positively to returns over time,” the research house says.
In the challenging months leading up to September 11 and directly following, Harrop says a focus on stocks rather than markets helped Platinum’s performance.
The volatility and variability in the market after September 11 also presented opportunities for finalist Credit Suisse Asset Management (CSAM), according to head of the international shares team, Russell Bye.
“Performance has been very strong against a weak market. In the last year, stock selection has been excellent within the fund,” he says.
He says the most value for CSAM’s international equities has come from being overweight in South-East Asia, and underweight in Europe.
“We are also underweight in the US, which has hurt us a little, but we have built that up over the past year,” he says.
Bye says the stock selection skills of the 160-odd analysts from Capital Group International, CSAM’s outsourced manager, is a key to the group’s performance.
A consistent approach during a year of turbulence across international markets has been fundamental to the performance of finalist Advance Funds Management, according to managing director Stephen Lam.
“The process is very disciplined and the results achieved have shown that the degree of outperformance is repeatable,” Lam says.
The main factors influencing global equity markets for Advance have been interest rate cuts in response to the slowing US and world economies and September 11, Lam says.
In this environment, Advance International equities has benefited with its value approach, focusing on consumer staples with solid earnings and buying companies with demonstrable earnings despite slowing economies.
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