Dealer groups and funds guilty of short-termism
Dealer group investment committees and superannuation fund trustees have become far too focused on the short-term, irrespective of the objectives of their clients and members.
That was the assessment of a Money Management roundtable this week examining Australian equities and the current mood of the market, with Hyperion Asset Management managing director Tim Samway declaring the industry was "suffering a pandemic of short-termism".
"I think we're in a pandemic of short-termism that runs right from the clients through to the companies that we invest in," he said.
Samway said the result of this short-termism was that the managing director of a corporation which didn't get results inside two years was "arguably ready to be sacked".
"That's arguably outrageous, but that's the pressure the funds management industry has placed on corporations," he said.
Samway said superannuation trustees were looking at monthly measures of performance, imagining that there was a thing called "peer risk" when in fact the level of inertia of superannuation fund members was incredible.
"No wonder the clients have a hard time when the whole industry is set up around short-termism," he said.
Lonsec senior investment consultant Veronica Klaus told the roundtable that there seemed to be a huge disparity between the end result the client was focused on and what the industry was actually focused on.
"There is absolutely too much focus on short-term outcomes," she said.
Recommended for you
Australian equity ETFs attracted record inflows of $3.2 billion in 1Q25, while heightened volatility led to a decline in flows for global equity ETFs, according to Vanguard.
The failure of a clinical trial by biotech firm Opthea has caused shares in its backer Regal Partners to decline 52 per cent year-to-date and hit its funds under management, quarterly flows show.
GQG Partners has revealed its quarterly flows for the first three months of 2025 were up 5.8 per cent, after a difficult final quarter of 2024 as a result of institutional redemptions.
Global asset manager Janus Henderson has signed a strategic partnership with life insurer Guardian Life, which will commit US$400 million to accelerate the firm’s fixed income development plans.
