How Platinum’s Alexander plans to turnaround flagship International Fund
New Platinum International portfolio manager Ted Alexander has shared how he plans to overturn the firm’s flagship portfolio.
Alexander, formerly chief investment officer at BML Funds, joined the fund manager last month to take over from co-chief investment officers and portfolio managers Andrew Clifford and Clay Smolinski. Clifford has taken a new role on the firm’s Investment Oversight Group, while Smolinski is on a six-month sabbatical.
In a webinar, Alexander discussed with chief executive Jeff Peters why he wanted to join Platinum and how the fund could look different in the future.
“It was a no-brainer to join Platinum, I jumped at the chance as soon as they mentioned the brand name. It is the greatest fund management brand in Australia in my view and has a long, trailblazing history in active management," he said.
The firm noted that advisers and shareholders are eager for the fund’s performance to improve. Over the past three years, the fund has returned 6.2 per cent per annum versus 14.9 per cent per annum by the MSCI World benchmark. Its $4.4 billion assets are primarily held by retail and wholesale investors with no institutional money although it has some large wholesale mandates.
The firm saw overall outflows of $358 million in February, but Peters said the International Fund hadn’t seen material outflows since the management change despite fears by Morningstar about the loss of two big name personalities.
The firm is also looking at the fee levels on the fund which, it said, is a concern that has been raised by financial advisers and fund researchers in relation to those offered by the Platinum's peers.
Peters said: “We are looking at fees, and it’s a product-by-product look, different fee levels will be appropriate for different products, not one size fits all. We’ve kicked off an effort to develop alternatives as we move forward on the International Fund and on different types of fee structures more broadly.
“My goal will be to make changes on those fee structures. We understand there is some opportunity there for us to do things differently.”
Regarding how Alexander thinks the portfolio will look different under his tenure, he said he is “very bullish” on China stocks and has hired a China analyst, has increased the shorts in the fund, and expects to have lower cash levels. As of February 2025, the fund has 11 per cent in cash.
Alexander said: “I’ve met with each analyst and we’ve done a full analysis of every stock in the portfolio. There are some stocks where we are doing a deep dive and that will take a few more weeks. Those we sell, we will need to find a replacement, and this is a great chance for analysts to pitch new ideas and I’ll have some ideas in areas I’ve covered such as healthcare.
“It’s a process, and what matters is the whole portfolio. My bread and butter is being a portfolio manager and controlling that overall exposure and how much we allocate to each sector.
“There is no agenda to change how the fund is invested, and the fund is set to outperform in the coming years. We are thinking about contrarian ideas to make money and protect it in a downturn.
“It’s not just cheap stocks and a lower PE ratio than the market. It’s about the valuation and the expected upside. It’s about being curious, not swallowing consensus and avoiding bias. The message I got was about flexibility and creative thinking, and I really like that.”
AUTHOR
Laura Dew
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